SMSFs: Request to adjust concessional contributions
Gavin: The ATO has advised that there is a new form for practitioners to use which advises the ATO that a member of an SMSF has made concessional contributions in one year, but their fund didn’t allocate them to the member until the following year.
The ATO’s advice says that most SMSFs use provisions in their trust deeds concerning contribution reserves to enable this strategy. Typically, these arrangements allow contributions to be recognised for income tax deductibility and other purposes in the first year, while not being counted towards the concessional contributions cap until the next year. The ATO says that, provided all associated legal requirements are met, this is a valid strategy under the tax and super laws according to TD 2013/22. Furthermore, the ATO advised that it is important that members of funds, or their advisers, must use this form when they wish to apply this strategy effectively. The SMSF annual return does not make provision for it, only allowing for correct reporting of contributions that are both allocated by the SMSF, and contributed in the same financial year. The information provided in this form allows the ATO the adjust the contributions information provided in the SMSF annual return in order to correctly apply the concessional contributions cap for both years included in the strategy.
The form (NAT 74851) can be downloaded at ato.gov.au/uploadedFiles/Content/SPR/downloads/SPR46558n74851.pdf.
Ref: ATO website – Request to adjust concessional contributions
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