Where a super fund's trust deed or governing rules permit, a contribution may be paid into a contributions reserve account before being allocated to a member. The ATO’s view of these arrangements for a SMSFs has been formalised in Taxation Determination TD 2013/22.
How are Contribution Reserve Transactions displayed in the SMSF Annual Return?
The ATO has updated the SMSF annual return instructions to provide additional guidance when you have used a contribution reserve strategy as outlined in TD 2013/22.
If you have used a contribution reserve strategy for concessional contributions as described in TD 2013/22:
employer contributions which were received in June 2015-2016 must be included at label A Employer contributions of Section F & G even if they were not allocated to the member’s account until July 2016 the following financial year
personal contributions which were received in June 2015-16 must be included at label B personal contributions of Section F & G even if they were not allocated to the member’s account until July 2016the following financial year
- The contribution will, therefore, be added to the member's closing member balance figure on the tax return. This is consistent with the ATO's tax return instructions
you must complete a Request to adjust concessional contributions form.
How to Process Contribution Reserve Transactions
|From the Main Toolbar, go to Accounting.||
|Select Transaction list||
Contribution reserves are recorded through the Transaction List using account 24200/MEMBERCODE.
- From the Transaction List screen, select New Transaction. From the drop-down list, select Bank Statement.
- Input the Date of the transaction and a Reference number. You can include a description of the transaction in the Description box.
- Under the Account heading, select the bank account from the Select an account box. Click on the next Account box. Begin typing and select account 24200/MEMBERCODE.
- Input the credit for the contribution amount received. Simple Fund 360 will post a corresponding debit entry to the bank.
- Select More Details which will open the Contribution Details panel.
- By default, the amount will be listed as an employer contribution. Remove the amount and allocate to the contribution reserve fields.
After you have entered the transaction, select Post or Post & Add Another to save.
Contribution Reserves auto allocation in the next financial year
Contribution reserves recorded in the current financial year will be automatically moved to the relevant member's contribution account (24200/MEMBERCODE) in the next financial year (1/7) during the Close Financial Year (Balance Forward) steps.
Users will not need to manually move these amounts. This journal is not editable.
Contribution Reserves Objection Form
In the event that an SMSF records contribution reserve amounts, the Contribution Reserve Objection Form (Request to adjust concessional contributions) will need to lodged via paper to the ATO.
This form notifies the ATO that you made concessional contributions in one financial year (year 1) but your self-managed superannuation fund (SMSF) did not allocate them to you until the next financial year (year 2).
See Contribution Reserve Objection Form for details on how to generate this Form in SF360.