A recent Australian Tax Office (ATO) interpretative decision has
confirmed that a member can make a contribution to a self-managed
super fund (SMSF) prior to 30 June 2012, claim the deduction for
the 2012 financial year, and the trustee of the SMSF can allocate
the contribution to the member in July 2012 so that it counts
toward the contribution caps in the 2012/13 financial year.
In ATO ID 2012/16, a member of an SMSF made a personal
contribution of $25,000 on 4 April 2011 and a subsequent
contribution of $25,000 on 28 June 2011. The trust deed allowed the
trustees to credit the 28 June contribution to a reserve account
and allocate the contribution to the member in the following
The ATO agreed with the trustees' actions and allowed it to
be counted as a concessional contribution in the financial year of
allocation rather than the year of receipt. This meant that the
member was allowed a deduction of $50,000 in his income tax
assessment for the 2010/11 financial year even though the
member's concessional contributions cap for that year was
There are specific rules that trustees should be aware of if
they allocate contributions on this basis. For example, the trustee
must allocate the contribution to a member of the fund:
within 28 days after the end of the month; or
if not reasonably practicable to allocate within that time,
such a longer period as is reasonable.
This can be an effective way of managing contributions but can
only be done if the trust deed of the fund allows for it.
Advisers and members of SMSFs contemplating this must review
their trust deeds to take advantage of this strategy and update
If you would like to discuss any issues relating to the
information in this alert, please contact a member of our
commercial team on 07 3231 2444.
Winner - EOWA Employer of Choice for Women Citation 2009, 2010
Winner - Australasian Law Awards Gold Employer of Choice 2011
Finalist - ALB Australasian Law Awards 2008, 2010 and 2011 (Best
Winner - BRW Client Choice Awards 2009 and 2010 - Best Australian
Law Firm (revenue less than $50m)
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).