Accountants warned on contribution reserving trap
Accountants planning to implement contribution reserving strategies for their clients in the next financial year have been told to pay attention to the new contribution caps for super.
SuperConcepts general manager of technical services and education Peter Burgess said if accountants are planning to hold back contributions to the beginning of the next financial year as part of a contribution strategy, they need to remember that the concessional contribution caps will reduce to $25,000.
“You can’t reserve $30,000 or $35,000, you can only allocate the concessional cap amount for the next financial year which is going down to $25,000,” explained Mr Burgess.
“If you are looking to use one of these contribution strategies in June next year because you need to take in account the reduced cap in the next financial year.”