The carry-forward rules are often overlooked by eligible individuals who do not use the full amount of their concessional contributions (CCs) cap in a particular financial year.
The general Concessional Contributions (CCs) cap increased from $25,000 to $27,500 on 1 July 2021, and careful use of the carry-forward rules may provide additional tax and retirement planning opportunities.
Carry-forward rules recap
An individual must satisfy the following conditions to use their unused CCs cap amounts:
- their total superannuation balance (TSB) is less than $500,000 at 30 June of the prior financial year, and
- they have unused CCs cap amounts in years commencing 1 July 2018 for one or more of the previous five years
These could benefit eligible individuals who may encounter financial windfalls, such as gains on personal investments, or inheritance.