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Concessional vs Non-concessional

Discussion in 'Financial Planning Study Group' started by samaka, 12th Apr, 2011.

  1. samaka

    samaka Well-Known Member

    30th Sep, 2007
    From the Kaplan notes:

    • Non-concessional – contributions where the contributor is either not eligible or has decided not to claim a tax deduction for the contribution. These contributions are therefore not taxable within the fund.
    • Concessional – contributions where the contributor is either eligible for or claims a tax deduction for the contribution. These contributions are subject to tax within the fund.

    So if a tax deduction is eligible, but the contributor chooses not to claim, which is it? Both descriptions seem to apply.
  2. AsxBroker

    AsxBroker Well-Known Member

    8th Sep, 2007
    Sydney, NSW
    Hi Samaka,

    Great question.

    Concessional contributions can come in a few different ways:

    Superannuation Guarantee Charge (standard 9%)
    Additional Employer Contributions
    Salary Sacrificing
    Notional Taxable Contributions
    Personal Concessional Contributions

    Personal concessional contributions are usually made by writing a cheque or transferred electronically by the superannuation member to their super fund. The superannuation member must complete a s290-170 form (previously known as S82AAT) which is a "Notice of intent to claim or vary a deduction
    for personal super contributions".

    These funds will go in as concessional contributions though the super fund will want the member to confirm how much is to be a personal concessional contribution vs non-concessional contributions. If the member does not complete the above mentioned form the super fund will mark the contributions as non-concessional and not take 15% contributions tax.

    Hope this helps.



    PS This is general information and doesn't take into accout your personal situation, before making an investment decision you should speak to your FPA registered financial professional.