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There is just days left to still access a five-year old concessional allowance. \u00b7 TikTok\/James Wrigley\/Getty <\/p>\n There is just days left to still access a five-year old concessional allowance. \u00b7 TikTok\/James Wrigley\/Getty <\/p>\n
With the end of the financial year<\/a> in sight, many Aussies will be thinking about last minute moves to boost their nest egg<\/a>. Superannuation in particular has become even more attractive as the Labor government moves to increase taxes on capital gains<\/a> for share market investors.<\/p>\n “It’s become more attractive by default because other options have become less attractive,” financial adviser James Wrigley said of making extra superannuation contributions. “There’s certainly a lot more interest in super now \u2026 people are looking at adjusting their plans and strategies,” he told Yahoo Finance.<\/p>\n Despite the major tax overhaul planned by the government, the roughly $4.5 trillion superannuation sector<\/a> will continue to keep its current generous level of CGT discount.<\/p>\n RELATED<\/strong><\/p>\n As Treasury outlines<\/a>, because super contributions and investment earnings are taxed at 15 per cent, but are eligible for a 33 per cent CGT discount, the effective tax rate on gains is 10 per cent. Given the proposed overhaul in the budget will mean investors could pay as much as 47 per cent on real gains, that’s a huge difference.<\/p>\n How do I make carry forward super contributions? <\/p>\n If you have less than $500,000 across all superannuation accounts in your name, you can take advantage of a rule that allows workers to max out their unused cap on concessional contributions from previous years. The cap this year is $30,000 and will jump to $32,500 next financial year<\/a>.<\/p>\n The carry forward rule allows you to go back and top up the last five financial years to take advantage of the tax discounts on offer.<\/p>\n First, you need to go to the MyGov website to access your personal ATO data. From there you can click through to your tax account, and choose \u2018Information\u2019 from the drop down Super menu, and then click \u2018Carry-forward concessional contributions\u2019.<\/p>\n From there it will show you how much of your concessional contributions you have left on the table, and a yearly breakdown of the last five years.<\/p>\n \u201cIt’s a rolling five year period of time,\u201d Wrigley explained. \u201cOn the first of July, that fifth year back will drop off your allowance.\u201d<\/p>\n But if you want to add to that fifth year while you still can, you will have to first max out the current financial year.<\/p>\n \u201cOnly when you exceed this year’s $30,000 cap, do you start to use up any of those previous years,\u201d he said.<\/p>\n Story continues <\/p>\n MORE:<\/strong> ATO deadline for $17,380 superannuation tax deduction just days away<\/strong><\/a><\/p>\n Once you max out the current year, extra funds will automatically go to the furthest back year. \u201cYou’ll fill up the fifth year, then you’ll fill up the fourth year, then you’ll fill up the third year,\u201d Wrigley said.<\/p>\n But if you plan to do this from your after tax earnings, you\u2019ll have to lodge a notice of intent to claim form with your superannuation fund. \u201cLots of super funds you can just do that online \u2026 but if they don\u2019t have that, there\u2019s a paper form you\u2019ll have to fill in.\u201d<\/p>\n \u201cThat form needs to be lodged before you lodge your tax return,\u201d Wrigley said. \u201cIf you lodge your tax return, and you haven’t lodged the form with your super fund, bad luck, it’s too late.\u201d<\/p>\n And if you\u2019re looking to do it this year, you\u2019ll need to make the payment in about the next 10 days to make sure it lands in time. While not all funds have a hard cut-off date around this, AustralianSuper reminded members this week that its cut off date is June 25, while Retirement Trust’s cut-off date is even earlier on June 22.<\/p>\n While your investments will see much less \u2018tax drag\u2019 inside your super fund, \u201cthe big thing that you have to consider is that you can’t touch the money till you’re 60 years old,\u201d Wrigley added.<\/p>\n \u2018If you don’t use it, you lose it\u2019 <\/p>\n Just over 679,000 people claimed a tax deduction for personal superannuation contributions in the 2022-23 financial year, the latest ATO data reveals.<\/p>\n Vanguard, one of the largest providers of low cost index funds in the world which now also offers a superannuation fund, said its research indicated more than 45 per cent all Australians had never made an additional contribution to their super.<\/p>\n Renae Smith, Chief of Personal Investor at Vanguard Australia, urged those who are eligible to understand if they might want to do so, and to get their payments in a week before June 30 to make sure it is processed.<\/p>\n “Many Australians assume that if they miss contributing in one year, that opportunity is lost. But the carry-forward rule means those missed contributions can potentially be used later, when people are better placed financially,” she said.<\/p>\n “It’s important to remember that unused caps don’t last forever. If you don’t use it, you lose it. That makes understanding what you have available, and acting before it expires, critical.”<\/p>\n Get the latest Yahoo Finance news – follow us on <\/strong>Facebook<\/strong><\/a>, <\/strong>LinkedIn<\/strong><\/a> and <\/strong>Instagram<\/strong><\/a>.<\/strong><\/p>\n Superannuation has become much more appealing after Labor’s tax hikes on assets in the budget. \u00b7 Getty <\/p>\n