Article - Australian Financial Review
Watch your super cap or cop it from the ATO, Andrew Yee quoted
|Publish Date:||29/10/2012|The Tax Office has a way of coming down heavily on those who pay themselves too much super, writes Gayle Bryant. Don’t let it happen to you.
While we are encouraged to save for our retirement through superannuation, we are severely penalised if we exceed our contributions caps.
The situation is being made more difficult as the caps are reduced. Since July 1, 2012, super fund members aged over 50 have had their concessional contributions cap reduced to $25,000, which is now the concessional cap for all age groups.
If you exceed your concessional cap you will end up paying 46.5 per cent on the amount (15 per cent contributions tax plus 31.5 per cent penalty tax). The situation worsens if you exceed the non-concessional annual cap of $150,000 (or $450,000 over three years) as penalty taxes of 93 per cent can apply.
HLB Mann Judd director Andrew Yee says he expects the issue of people exceeding their contributions limit will continue. "Although hopefully taxpayers are now more aware about the dangers through publicity campaigns," he says.
Article published by Gayle Bryant in Australian Financial Review on 24 October 2012.