SMSF strategy – Tax Office form to adjust concessional contributions

The ATO has released a form that notifies it that a member of a self-managed superannuation fund (SMSF) has made concessional contributions in one financial year (year 1) but their SMSF did not allocate them to the member until the next financial year (year 2).

Most SMSFs use provisions in their trust deeds concerning contribution reserves to enable this strategy. Typically, SMSF members will have made these arrangements to allow contributions to be recognised for income tax deductibility and other purposes in year 1 while not being counted towards their concessional contributions cap until year 2.

Provided all the associated legal requirements are met, the ATO said this is a valid strategy under the tax and super laws according to the view outlined in Taxation Determination TD 2013/22.

The ATO also added that it was important that taxpayers use the above-mentioned form (entitled, Request to adjust concessional contributions) when they wish to apply this strategy effectively (noting that the SMSF annual return does not otherwise make provision for it). The ATO recommended that the form be lodged before, or at the same time, as both the fund’s SMSF annual return and the member’s own individual tax return are lodged.

The ATO also added that it was important that taxpayers use the above-mentioned form (entitled, Request to adjust concessional contributions) when they wish to apply this strategy effectively (noting that the SMSF annual return does not otherwise make provision for it). The ATO recommended that the form be lodged before, or at the same time, as both the fund’s SMSF annual return and the member’s own individual tax return are lodged.

The ATO also added that it was important that taxpayers use the above-mentioned form (entitled, Request to adjust concessional contributions) when they wish to apply this strategy effectively (noting that the SMSF annual return does not otherwise make provision for it). The ATO recommended that the form be lodged before, or at the same time, as both the fund’s SMSF annual return and the member’s own individual tax return are lodged.

Post a comment