Important Pre-Non Concessional Contribution Check
Just this week we have seen two instances where a small excess concessional contribution was notified to, and disregarded by, the member because the personal tax liability that arose from leaving the contribution in the fund was minor. The additional consequence – the counting of the excess against the member’s non concessional contribution limit – was ignored. This caused a premature triggering of the 3 year count with significant unintended excess non-concessional contribution consequences in subsequent years.
This is an easy mistake to make, particularly as the contribution may have been made to a second fund (possibly to maintain life insurance cover) and may not appear on the member’s MyGov record until sometime after it was made.
This represents one of the more significant detrimental consequences of the lack of data fed member information from the ATO – there are several more. Until this serious information deficiency is rectified, it is advisable to manually check the member’s MyGov records before making non concessional contributions.