3 Year Bring Forward Rule

The 3-year bring-forward rule allows Trustees in an SMSF to utilise 3 times the Non-Concessional Contribution cap within a 3-year financial period.

For more clarification, please see the example below:

Sam, who is 40, decides to make a Non-Concessional Contribution of $200,000 into his Super Fund in the 2015 financial year. Although this exceeds the annual Non-Concessional Cap of $180,000, he is able to make the contributions to his Super Fund without having to pay the excess contributions tax as the total cap of the next 2 financial years (2016 and 2017) has been brought forward to 2015. Therefore, the amount that Sam contributed stays within the total Non-Concessional Cap of $540,000 ($180,000 x 3).

However, not the full amount of the 3-year bring-forward Non-Concessional Contribution cap needs to be utilised once triggered.

Please note that as of 1 July 2017, the Non-Concessional Contribution cap will be reduced to $100,000. For more information, please see here.

Facebook Comments:

Leave a comment

You must be logged in to post a comment.