Date of article: 20 May 2014
Last updated: 20 May 2014
The Government has announced that it will make the taxation of contributions exceeding the non-concessional cap fairer.
New measures will to allow individuals the option to withdraw amounts exceeding the non-concessional cap, instead of being subject to excess contributions tax.
This will apply to excess non-concessional contributions made after 1 July 2013.
The measure will allow individuals to withdraw the amount that exceed the non-concessional cap and associated earnings. If an individual chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual’s marginal tax rate.
Individuals who leave their excess contributions in the fund will continue to be taxed on these contributions at the top marginal rate.
Currently, superannuation contributions that exceed the non‑concessional contributions cap are taxed at the top marginal tax rate, including inadvertent breaches of the cap.
The details are yet to be worked out.
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