What will be the limit on non-concessional contributions?

From 1 July 2007, non-concessional contributions made to super will be limited to $150,000 a year. This is called the non-concessional contributions cap.

You will be taxed on non-concessional contributions over the limit at the rate of 46.5%. You must ask your super fund to release money to pay this tax.

• People under 65 can make non-concessional contributions of up to $450,000 over a three-year period.

• The non-concessional contributions cap will always be three times the concessional contributions cap.

What are non-concessional contributions?

Most commonly, non-concessional contributions are the contributions you make for which a tax deduction is not claimed. Unlike employer contributions, the person who makes the contribution is generally not entitled to a tax deduction for that contribution. They are often referred to as undeducted or 'after-tax' contributions. The contributions listed below are non-concessional contributions. They include, but are not limited to:

• personal contributions for which an income tax deduction is not claimed

• contributions a person's spouse makes to their super fund account, and

• transfers from foreign superannuation funds (excluding amounts included in the fund's assessable income).