Contribution splitting allows members to split their concessional contributions with their spouse.
When a split is made, the contribution is transferred over from the member accumulation account that made the contribution to the spouse's accumulation account. For more information refer to the ATO website.
In this example, John made a concessional contribution of $10,000 in the last financial year (2015) that will be split to his spouse, Mary in the current year (2016).
Steps in Simple Fund 360:
- John will record a concessional contribution in the prior year ($10,000) which will be taxed at 15%. Refer to How to Enter Contributions for more information.
- In the next financial year, the contribution split will occur. John will transfer $8,500 (net of 15% tax on concessional contributions) to Mary as a rollover from account 46000. In this example, the transfer takes place on 01/07/2015.
- In the same transaction, Mary will record a transfer in to account 28500 of $8,500.
- Once the transaction has been recorded it can be saved and the documents (Superannuation contribution splitting application) can be prepared.
Contributions splitting does not reduce the amount counted towards the original member's concessional contributions cap.
Ensure the member recording the split to their spouse has recorded the concessional contribution to their account in the prior year before proceeding with the below steps.
How to Process
Record contribution splitting events through the Transaction List. Selecting account 46000/MEMBERCODE will prompt Simple Fund 360 to present you with the Rollover Payment Details section allowing you to record the transaction.
Ensure you have completed The Create Entries Process prior to posting a lump sum payment partway through the year. This will ensure member balances are up to date prior to the rollout/transfer.
|From the Main Toolbar, go to Accounting.||
|Select Transaction list||
Select New Transaction | Journal
- Under the Account heading, select account 46000/MEMBERCODE (select the member recording the Rollover payment).
- Input the Rollover payment as a Debit.
Input the Rollover payment details in the Rollover Payment Details section that appears below (More+panel)
|Complete: Type of Payment, Member, Spouse and Display in Operating Statement options|
To prepare the Superannuation Contributions Splitting Application, select Contributions Splitting for a Spouse. This will ensure the payment appears in label Q on the tax return. See ATO website for more information.
The member who is making the contribution will be selected.
Under the Spouse section click into the search field and look for the member (spouse) receiving the contribution. This contact will be picked up from the Contacts screen.
Select Yes or No as to whether the payment amount will appear in the Operating Statement.
The contribution amount will be reflected in SMSF Annual return under Section F, member outward rollovers and transfers.
|Service Period Start Date and Date of Payment|
The Service Period Start Date will appear (picked up from The Member List).
|Rollover Components and Preservation Amounts|
You will be required to adjust the Rollover Components field if the member has a tax free balance. The amount of contribution being split is from the Taxable Component.
6. In the next line item, select the contribution account 28500/MEMBERCODE (the member receiving the contribution). In the More Details Panel, input the amount into the taxable component (to reflect the original contribution made) and enter the appropriate preservation component.
This contribution amount will be reflected in SMSF Annual return under Section F, member Inward rollovers and transfers.
Select Post and then select Post and Prepare Documents to produce the application.
Note: t is recommended to select Post & Prepare Documents to be able to re-produce them at a later stage from the reports screen. If you select Post only, you can enter back into the transaction to prepare documents.