The 3-year bring-forward rule allows Members in an SMSF to contribute more than the Non-Concessional Contribution (after-tax Contributions) cap of $110,000 during a 3-year financial period from 1 July 2021. From 1 July 2017 to 30 June 2021, the non-concessional contributions cap was $100,000.

For more clarification, please see the example below:

Sam, who is 40, decides to make a Non-Concessional Contribution of $220,000 into his Super Fund in the 2019 financial year. Although this exceeds the annual Non-Concessional Cap of $110,000, he is able to make the contributions to his Super Fund without having to pay the excess contributions tax. This is because the total cap of the next 2 financial years (2020 and 2021) has been brought forward to 2022. Therefore, the amount that Sam contributed stays within the total Non-Concessional Cap of $330,000 ($110,000 x 3).

However, not the full amount of the 3-year bring-forward Non-Concessional Contribution cap needs to be utilised once triggered.

By bringing forward the caps of the next 2 years, members can make up to 3 years’ worth of non-concessional contributions in the First Year. Previously, this rule was only applicable to those under the age of 65 or 67. However, from 1 July 2022, this rule will now apply to those under the age of 75.

Bring-Forward Provision for People Under 75

If you are under 75 years old and you make excess non-contributions, the bring-forward rule will automatically be triggered and bring forward the next two years’ non-concessional contributions – but certain conditions apply. This means:

  • You can make a total of $300,000 over a three-year period as your non-concessional contributions if the bring-forward rule is triggered after 1 July 2017. 
  • You can make a total of $330,000 over a three-year period as your non-concessional contributions if the bring-forward rule is triggered after 1 July 2021.

If you exceed your non-concessional contribution, the ATO will issue a letter to the Trustee and you may need to pay extra tax.

Note:

  • Excessive concessional contributions (before-tax contributions) will count towards the non-concessional contributions cap and can trigger the bring-forward provision.
  • Life insurance premiums and fund fees are considered as contributions

Bring-forward rule for individuals who are turning 75

From 1 July 2022, the bring-forward rule cannot be applied on Members who are aged 75 or over. The maximum amount of non-concessional contribution for an individual aged 75 or over is $110,000 per annum. In addition, the work test must be met by the Member in order to make contributions to your SMSF. If the non-concessional cap is exceeded, Members may withdraw the excess amount from the Fund, otherwise the excess amount may be taxed at the marginal tax rate.

  • Before you turn 75
    If you are aged 74 years or younger on 1 July 2021, you can take advantage of the bring-forward rule for the entire Financial Year. This means that you can make a $330,000 non-concessional contribution in the Financial Year that precedes the year in which you turn 75, assuming that the bring-forward rule has not been triggered in the previous years.
  • After you turn 75
    You can still make up to $110,000 of non-concessional contributions to the SMSF. You are required to satisfy the work test.
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