Given that the new rules will not be effective until 1 July 2017, the current Non-Concessional Cap (NCC) will continue to apply up until and including 30 June 2017. The current rules allow NCCs up to $180,000 per year, and the opportunity for individuals under age 65 years at any time in the 2016/17 income year to ‘bring forward’ an additional two years of contributions, enabling total contributions of up to $540,000 ($1,080,000 for a couple).

What new rules will apply

The new proposals reduce the annual NCC limit from $180,000 to $100,000 from 1 July 2017. The bring forward provision will still be available, but the maximum total NCCs for an individual will be $300,000 instead of $540,000.

Another important new rule is the removal of eligibility to make NCCs where the total super balance is more than $1.6 million at 30 June in the previous income year. Considering this, the use of the available non-concessional contribution caps in the 2016-17 income year for individuals with more than $1.6 million is even more important, as it presents the last opportunity to make non-concessional contributions into superannuation.

As a result of the above changes to super, high net worth individuals have several opportunities and key decisions that must be made early in calendar year 2017, to ensure you take advantage of the transitional rules.

If you believe any of the above changes could apply to your own situation, please contact your adviser to discuss before the financial year is over.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information.