Bring forward rule

Bring forward rule

In this post we discuss the Bring Forward Rule.

Non-Concessional contributions provide a great way to get money into super quickly.  Up to $150,000 can be contributed each year.  This will increase to $180,000 from July 2014.  

The Bring Forward Rule is non-concessional contributions on steroids.  It allows a member of a super fund to contribute up to 3 years of non-concessional contributions in one year.  So you could contribute up to $450,000 in the year ending June 2014.  Here are a few things to beware of:

• As soon as you exceed $150,000 in a given year, the Bring-Forward Rule is triggered.  Therefore a member may have pulled the trigger last year or the previous year.  The only way to be sure is to look at the financial statements from prior years.
• Suppose the Bring Forward Rule is triggered in the 2012 financial year because contributions of $160,000 were made.  A further $290,000 of contributions can still be made in the 2012, 2013, and 2014 years.  But not another $450,000 - you would have to wait until 2015 to contribute another $450,000.
• The Bring Forward Rule can only be triggered if you are under 65 at some stage in the year in which you pull the trigger.  If you then turn 65 after you have pulled the trigger, your limit of $450,000 continues to apply for the next 2 years.  However, once you are over 65 you can't make a non-concessional contribution of over $150,000 in a single transaction and you must meet the work test.
• When the limit increases from $150,000 to $180,000 in July 2014 - if you trigger the bring forward rule in the 2014 financial year, your limit remains $450,000 in the 2015 and 2016 years.

If you have any questions about the Bring Forward Rule then feel free to call us on 1300 546 300.  We would be happy to assist.

Would you like to experience faster, easier, and better value SMSF actuarial certificates?  Or do you prefer wasting time and paying too much?  For a free trial, call us on 1300 546 300 and in a few minutes you will have your next Actuarial Certificate in your inbox.  

THIS ARTICLE WAS CORRECT AT THE TIME OF WRITING. SMSF RULES CHANGE OVER TIME AND THE ARTICLE MAY BE LESS RELEVANT IN THE FUTURE.