A technical specialist has warned practitioners to tell their clients not to rely solely upon the myGov portal to monitor the total amount of concessional contributions they have made over the past five years as the information displayed may be incomplete.
“If something looks a little bit astray in myGov when we’re looking at the concessional contributions made in the previous five years versus the unused [portions of the concessional contributions cap that can be carried forward, it’s] because the system has been up for seven years at the moment,” Insignia technical services senior manager Scott Brown told attendees of an MLC technical webinar hosted today.
“It means where we’ve used a catch-up [concessional contribution] from say the 2018/19 or 2019/20 [income years that extend beyond five years], it just might make our numbers look a little odd.
“That’s why it’s important to look at the myGov [information], but also to match that up with details from [the member’s] actual super fund record to make sure we’re not over-contributing [and contravening] what we are allowed to do.”
With regard to individuals who would gain most benefit out of using the unused concessional contributions cap catch-up rules, Brown identified a particular cohort of people not usually considered when examining these provisions.
“One [group of people who can benefit from these rules and is not quite as well known] is non-residents with property income,” he indicated.
“These are clients, for example, who might have given up their primary residence while they’ve gone overseas to work for two years and might be renting it out.
“So for a non-resident from dollar one the tax rate is 30 per cent [with] no Medicare levy payable. So every time they can make a deductible contribution into super, [in an environment where there is] 15 per tax, they can halve the amount of tax that they’ll pay on some of that rental income they’ll receive as a non-resident.”
