Non-Concessional Contribution (NCC)

A Non-Concessional Contribution is after tax money that Trustees contribute into their SMSFs.

From 1 July 2017, the Non-Concessional Contribution cap will be reduced from $180,000 to $100,000 per year.

The three year bring forward rule is therefore reduced from $540,000 (3 times $180,000) to $300,000 (3 times $100,000). However, in the interim, if the Non-Concessional Contributions made in 2016 and 2017 financial years do not exceed $180,000, then the three year bring forward Non-Concessional Contribution cap for the 2018 financial year and later financial years is just $300,000. For a better understanding, please see the example below:

Sam, who is 40, has a superannuation balance of $200,000 and makes a Non-Concessional Contribution of $300,000 in the 2017 financial year. This triggers the three-year bring forward rule of $540,000. Depending on the year that the Non-Concessional Contribution is made, transitional arrangements will apply differently to the remaining Non-Concessional Contribution available.

Income Year when the Non-Concessional Contribution was made Annual Cap on Non-Concessional Contribution
2016-2017 180,000
2017-2018 100,000
2018-2019 100,000
Total Non-Concessional Contribution cap for Sam 380,000
Less Non-Concessional Contribution from Sam in 2016-2017 (300,000)
Remaining Non-Concessional Contribution amount for Sam 80,000

 

The available Non-Concessional Contribution cap for Sam is $380,000 for 2017, 2018 and 2019 financial years. This means that after making the $300,000 Non-Concessional Contribution in the 2017 financial year, Sam will only be able to make Non-Concessional Contribution of $80,000 in the next two financial years without breaching the cap.

Other Non-Concessional Contribution points to note

  • Any person who holds a superannuation balance of more than $1.6 million cannot make any further Non-Concessional Contribution as of 1 July 2017.

For more information on other forms of Contributions or Contributions in general, please see here.

 

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