Contributions caps relate to financial years, not calendar years

Q: I understand the three-year bring-forward rule that allows you to contribute up to $450,000 in after-tax contributions. My question is: What date does the second three-year period start? For example, if I contributed $450,000 on 1 Dec 2009, does that mean I can contribute another $450,000 after 1 July 2012 (or should it be after 1 Dec 2012)?

For readers who don’t understand the bring-forward rule, refer to the article: Your 2010/11 guide to non-concessional (after-tax) contributions.

The contributions caps (concessional or non-concessional), including the bring-forward rule, relate to the financial year only rather than the anniversary of the contribution, or a 12-month calendar year.

For example, if an individual took advantage of the bring-forward rule on 1 December 2009, making a $450,000 non-concessional contribution, such a contribution would represent the individual’s after-tax cap for the 2009/2010, 2010/2011 and 2011/2011 financial years.

Any further non-concessional contributions could then be made from 1 July 2012.

Note: Anyone considering contribution strategies should do their own research, or seek advice, to ensure such strategies are appropriate to their financial circumstances and needs.

Related articles:

1. Wearing two contributions caps
2. Turning 65: Maxing out the after-tax contributions cap
3. Watch the (contributions) caps when super sailing
4. Super contributions: Turning 65 part-way through the year
5. 65 and over: making super contributions