With the first quarter down in the new financial year, it is important to start considering some of the tax planning opportunities available through superannuation in the remaining nine months before 30 June 2023.
One such opportunity is to maximise any unused concessional contributions. This could result in the reduction of tax and increase your superannuation benefits. The carry forward arrangements involve accessing unused concessional cap amounts from up to five previous financial years, dating back to 2018/19.
To use your unused cap amounts, you must meet two conditions:
- your total super balance at the end of 30 June of the previous financial (2022) year was less than $500,000; and
- you make concessional contributions in the current financial year (2023) that exceeded your general concessional contributions cap (note: the concessional cap includes your employer’s superannuation guarantee and any salary sacrificed amounts).
Depending on your age, personal income and individual circumstances (for example, if you have a one-off capital gain on an asset sale), this could be a great opportunity to save tax, whilst growing your super balance and allowing you to take advantage of the recent dip in equity markets by topping up your super. Remember of course that contributions to super cannot be accessed until you reach preservation age (this can vary, but generally age 60) and that caution should be exercised not to exceed the cap.
Published 30 September, 2022