Carry Forward Concessional Super Contribution- Use it or lose it!

Way back in 2016 the government introduced a provision in their Superannuation Reform Package that allowed tax payers to carry forward any unused concessional super contributions. We commonly call it the Carry Forward Concessional contributions, and for the sake of brevity, let’s call it CFC.

Now although it came into law in 2016, the first year that it applied to was the 2018/19 tax year. The concession was only able to be carried forward for five years. And guess what? This year is the last year that you can use any of your 2018/19 carry forward concessional.

So, if you don’t Use it, you will Lose it!

In the video below we show you how to find your current CFC amount using the ATO records.

One important criteria to be able to use the CFC is that you need to have a Total Super Balance at last June 30, that is below $500,000. That includes all super accounts, and also a special calculation if you have a Defined Benefit superfund.

Also, if you are over 67 you need to meet the work test to claim a tax deduction for personal contributions, so make sure to check into the exact requirements if you are in that age bracket.

The CFC is a powerful tax saving tool especially when you have a large capital gain that has been crystalised, or if you have income above $75,000 and want to save tax.

For investors with low taxable income this is probably not something you need to worry about, although you may be able to benefit from Non-Concessional contributions, which we have covered in other articles, such as this one that was our last end of year checklist.

For a more personalized review of whether you need to be acting on this use it or lose it opportunity speak to your financial advisor or tax accountant.

Disclaimer: This information is general in nature and has not been tailored to your individual circumstances. If unsure about its application to you please seek personal advice. I should not need to tell you that, but apparently some people don’t expect the contents of a coffee cup to be hot, and don’t understand that you shouldn’t eat copier toner.