Edited version of private advice

Authorisation Number: 1052054434752

Date of advice: 8 November 2022

Ruling

Subject: Total superannuation balance and non-concessional contributions

Question

Will you have excess non-concessional contributions if you make non-concessional contributions in accordance with subsection 292-85(2) of the Income Tax Assessment Act 1997 (ITAA 1997) in the 20XX-XX financial year?

Answer

No.

This advice applies for the following period:

Ending 30 June 20XX

The arrangement commences on:

1 July 20XX

Relevant facts and circumstances

You were born on XX.XX.XXXX

Your total superannuation balance on 30 June 20XX was less than $XX million.

You wish to contribute $XXX of non-concessional contributions to your super accumulation account in the 20XX-XX financial year.

Reasons for Decision

Summary

Based on the provided information, you are eligible to make non-concessional contributions of up to $XXX to your superannuation account in the 20XX-XX financial year without exceeding your non-concessional contributions cap amount.

As the proposed contributions will be within the allowed non-concessional contributions cap amount, they will not be subject to taxation.

Detailed reasoning

Subsection 292-85(2) of the ITAA 1997 states that under the general rule your non-concessional contributions cap for a financial year is:

(a) unless paragraph (b) applies - the amount (the general non-concessional contributions capfor the year) that is 4 times your concessional contributions cap under subsection 291-20(2) for the year; or

(b) if, immediately before the start of the year, your total superannuation balance equals or exceeds the general transfer balance cap for the year--nil.

Note: This subsection does not take into account any increase in your concessional contributions capunder subsection 291-20(4).

Subsection 291-20(2) of the ITAA 1997 states that your concessional contributions cap is:

(a) for the 2017-2018 financial year--$25,000; or

(b) for the 2018-2019 financial year or a later financial year--the amount worked out by indexing annually the amount mentioned in paragraph (a).

The indexed concessional contributions cap amount for the 20XX-XX financial year is $27,500. Accordingly, the annual non-concessional contributions cap amount for the 20XX-XX financial year is $110,000 (4 x $27,500).

The general transfer balance cap is a limit on the amount of superannuation that can be transferred into the retirement phase. For the 20XX-XX financial year the general transfer balance cap is $1,700,000.

So, as per the provisions listed above, an individual with total super balance that is below the general transfer balance cap of $XXmillion at 30 June 20XX, will be eligible to make the full annual non-concessional contributions cap amount of $110,000 into their superannuation fund in the 20XX-XX financial year.

Hence, based on the provided information, you are eligible to make non-concessional contributions of up to $110,000 to your superannuation account in the 20XX-XX financial year without exceeding your non-concessional contributions cap amount.

As the proposed contributions will be within the allowed non-concessional contributions cap amount, they will not be subject to taxation.