Concessional
Contributions
Concessional
contributions are contributions made on your behalf by someone other than your
spouse for example, an employer.
They also include contributions you make
personally but for which you claim a tax deduction. Not everyone is allowed to
claim a tax deduction for their own contributions – generally it’s people who
are self-employed or not working.
Changes in 2017 have
meant that anyone is allowed to claim a personal tax
deduction for contributions as long as they meet the criteria
for claiming them.
The reason these contributions are called “concessional” is that they
are being treated in a favourable way from a tax perspective. They give rise to
a tax deduction for whoever makes the contribution and they are only taxed at
15% when they are received by your SMSF.
Beneficial tax treatment like this is
often described as giving tax concessions, hence the name, concessional contributions.