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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012583497596

Ruling

Subject: Non-concessional contributions

Questions

Can you make personal contributions in the 2013-14 income year without exceeding the non-concessional contributions cap?

Advice/Answers

Yes

This ruling applies for the following period

Year ending 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts and circumstances

You are under 65 years of age.

You intend to make a non-concessional contribution to the Fund in the 2013-14 income year.

Assumptions

None.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 292-80.

Income Tax Assessment Act 1997 Subsection 292-85(2).

Income Tax Assessment Act 1997 Subsection 292-85(3).

Income Tax Assessment Act 1997 Paragraph 292-85(3)(a).

Income Tax Assessment Act 1997 Paragraph 292-85(3)(b).

Income Tax Assessment Act 1997 Paragraph 292-85(3)(c).

Income Tax Assessment Act 1997 Subsection 292-85(4).

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) Regulations 1994

Further issues for you to consider

Not applicable.

Anti-avoidance rules

Not applicable.

Summary of decision

In the 2013-14 income year you are able to make a contribution of $X in the 2013-14 income year without exceeding the non-concessional contributions cap.

Detailed reasoning

Non-concessional contributions cap

Non-concessional contributions made to a complying superannuation fund will be subject to an annual cap (subsection 292-85(2) of the Income Tax Assessment Act 1997 (ITAA 1997)). For a person who is 50 years of age or more their non-concessional contributions cap for the 2013-14 income year is $150,000.

Non-concessional contributions include:

    Ÿ personal contributions for which an income tax deduction is not claimed;

    Ÿ contributions a person's spouse makes to their superannuation fund account; and

    Ÿ transfers from foreign superannuation funds (excluding amounts included in the fund's assessable income).

Some contributions are specifically excluded from being non-concessional contributions. These include:

    Ÿ a Government co-contribution;

    Ÿ a contribution arising from a structured settlement or an order for personal injury;

    Ÿ a contribution relating to some capital gains tax (CGT) small business concessions to the extent that it does not exceed the CGT cap amount ($1,000,000 indexed annually) when it is made; and

    Ÿ a roll-over superannuation benefit.

A taxpayer will be taxed on non-concessional contributions over the cap at the rate of 46.5% (section 292-80 of the ITAA 1997).

In this case, you are able to make a contribution of $X in the 2013-14 income year without exceeding the non-concessional contributions cap.

Please note, as a concession, to accommodate larger contributions, taxpayers under age 65 in an income year are able to bring forward future entitlements to two years worth of non-concessional contributions.

The Bring Forward Provisions

For a person who is 50 years of age or more their transitional concessional contribution cap for the 2013-14 income year is $25,000 and their non-concessional contributions cap is $150,000.

However, subsections 292-85(3) and (4) of the ITAA 1997 ('the bring-forward provisions') provide that the non-concessional contributions cap is calculated differently if certain conditions are satisfied.

Subsection 292-85(3) of the ITAA 1997 states:

However, subsection (4) applies instead of subsection (2) in determining your non-concessional contributions cap for a financial year (the first year) if:

(a) your non-concessional contributions for the first year exceed the amount mentioned in subsection (2) for that year; and

(b) you are under 65 years at any time in the first year; and

(c) a previous operation of subsection (4) does not determine your non-concessional contributions cap for the first year.

Therefore, a person who is under 65 years of age who makes non-concessional contributions during the income year that exceed the non-concessional contributions cap specified under subsection 292-85(2) of the ITAA 1997, would trigger the bring-forward provisions and their non-concessional cap would be calculated in accordance with subsection 292-85(4) of the ITAA 1997.


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