Rollovers

Contributions and Rollovers

As an SMSF trustee, you can accept contributions and rollovers for your members from various sources but there are some restrictions, mostly depending on the member’s age and the contribution caps.

You need to properly document contributions and rollovers, including the amount, type and breakdown of components, and allocate them to the members’ accounts within 28 days of the end of the month in which you received them.

 

rollovers

A Rollover is when a member transfers some or all of their existing super between funds.

Receiving a Rollover

Before rolling over benefits to your SMSF, APRA-regulated super funds check with our systems to confirm that the person requesting the rollover is a member of your fund. So make sure your fund membership details are up to date in our systems and notify us of any changes.

A rollover from another fund is not included in the assessable income of your fund, unless the rollover amount includes an element untaxed in the fund.

If it does contain an untaxed element, you include the amount of that element in the assessable income of your fund – up to the untaxed plan cap amount – in the financial year the rollover occurs.

If the untaxed element exceeds the untaxed plan cap, the originating fund should withhold tax – at the top marginal rate plus Medicare levy – from the amount over the cap before releasing the rollover to your fund. You add this now-taxed amount to the tax-free component of the rolled-over amount.

Example: Rollover with an untaxed element

On 5 September 2014, Tom asks his fund to roll over his super interest of $1.5 million. This is an untaxed element. The untaxed plan cap amount for 2014–15 is $1.355 million, meaning that Tom's rollover amount exceeds the cap by $145,000. The originating fund must withhold tax of $71,050 (49% of $145,000).

The amounts reported by the originating fund on the rollover benefits statement will be $73,950 ($145,000 – $71,050) at the 'tax-free component' label and $1.355 million at the 'element untaxed in the fund' label. Tom's SMSF will report the $1.355 million as income at the 'personal contributions' label in the SMSF annual return.

Making and reporting a rollover

When rolling over your members' benefits to another super fund, you need to:

  • Confirm that the receiving fund is complying
  • Complete a Rollover benefits statement and:
    • Give the completed statement to the receiving fund, either with the payment or within seven days
    • Give a copy to the member within 30 days
    • Keep a copy for your records for five years.
Personal contributions – deductions

If a member is eligible, they can claim an income tax deduction for super contributions they make for their own benefit. A member who intends to claim a deduction must notify you of this intent.

The member must give you the notice by the earlier of:

  • The time they lodge their personal income tax return for the financial year during which the contribution was made
  • The end of the financial year following the year the contribution was made.

 

The notice is invalid if:

  • The person is no longer a member of your SMSF
  • You no longer hold the contribution because of a partial rollover that included the contribution
  • You have paid a lump sum or have started to pay a super income stream that includes the contribution.

 

In these circumstances, the member will not be able to claim a deduction for the personal contribution made.

Acknowledging valid notices

You must acknowledge your member's valid notice. Your acknowledgment should include:

  • The date your fund received the notice
  • Any subsequent variations that your fund received
  • Member account and fund details
  • The total amount of personal contributions that the notice covers
    • The amount the member has notified you they intend to claim as a deduction
    • The dates the contributions were made or the financial year they were made in.

 

This ensures that your members are able to claim the deductions they're entitled to and that super co-contributions and excess contributions tax are correctly applied.

You don't have to acknowledge the notice if the value of the relevant super interest on the day you received the notice is less than the tax that would be payable by you for the contribution.

Deadline for varying notices

If the member claiming the deduction has made an error with their notice of intent to claim a deduction, the notice can be varied (including varied to nil). Generally they need to do this by the same deadline as the original notice. After this, the notice can't be varied unless:

  • A deduction for the contributions is not allowable (that is, the member was ineligible to claim a deduction)
  • The variation reduces the amount shown on the original notice by the amount that is not allowable as a deduction.
Contributions you can accept

There are minimum standards for accepting contributions into your SMSF, and the trust deed of your fund may have more rules. Whether a contribution is allowable depends on:

  • Whether you have the member's tax file number (TFN) – if not, you can't accept member contributions
  • The type of contribution – for example, you can accept mandated employer contributions, such as super guarantee contributions from a member’s employer, at any time
  • The age of the member – for example, you generally can't accept non-mandated contributions for members aged 75 or over
  • Whether the contribution exceeds the member's fund-capped contributions limit.

 

Generally you can't accept an asset as a contribution from a member, but there are some exceptions.

If your SMSF will receive contributions from employers (other than related-party employers), you'll need an electronic service address to receive the associated SuperStream data.

Member's tax file number

When a member joins your fund, ask for their TFN and provide it to us. You can do this when you register the fund or when a new member joins.

If a member hasn't quoted their TFN:

  • Your fund can't accept member contributions for them, such as personal and eligible spouse contributions
  • Your fund has to pay extra tax on some contributions made to that member’s account
  • The member may not be able to receive super co-contributions
  • There may be administrative delays if we can't identify the member from the information you've provided.

 

A member is not required by law to provide their TFN.

Mandated employer contributions

Mandated employer contributions are contributions made by an employer under a law or industrial agreement for the benefit of a fund member. They include super guarantee contributions.

You can accept mandated employer contributions for members at any time, regardless of their age or the number of hours they’re working.

Non-mandated contributions

Non-mandated contributions include:

  • Contributions made by employers over and above their super guarantee or award obligations (such as salary sacrifice contributions)
  • Member contributions – these are contributions made by or on behalf of a member, such as
    • Personal contributions
    • Super co-contributions
    • Eligible spouse contributions
    • Contributions made by a third party, such as an insurer.

 

You can accept non-mandated contributions in the following circumstances:

  • Members under 65 years of age
    You may accept all types of non-mandated contributions. However, you can only accept personal contributions made by the member if you have their tax file number (TFN).
  • Members aged 65 or over but under 70
    You may accept all types of non-mandated contributions if you have the member’s TFN and the member is gainfully employed on at least a part-time basis*.
  • Members aged 70 or over but under 75
    You may only accept employer contributions and personal contributions made by the member. You must have the member’s TFN and they must be gainfully employed on at least a part-time basis*. For a member turning 75, the contribution must be received no later than 28 days after the end of the month that the member turns 75.
  • Members aged 75 or over
    You generally can't accept non-mandated contributions.

 

Super co-contributions and employer contributions that relate to a valid contribution period for the member can be accepted at any time.

* 'Gainfully employed on at least a part-time basis' means the member is gainfully employed for at least 40 hours in a period of 30 consecutive days in each financial year in which the contributions are made. Unpaid work does not meet the definition of 'gainfully employed'.

If you receive a member contribution and you don’t have the member’s TFN, you need to return the contribution within 30 days of becoming aware that you have received it, unless the member’s TFN is quoted to you within that period.

In specie (asset) contributions

In specie contributions are contributions to your fund in the form of an asset other than money.

Generally you must not intentionally acquire assets (including in specie contributions) from related parties of your fund. However, there are some significant exceptions to this rule, including:

  • Listed shares and other securities
  • Business real property (land and buildings used wholly and exclusively in a business).
Contribution caps

The Contribution Caps limit the amount that can be contributed for a member each financial year. The caps are indexed annually. A member whose total contributions in a year exceed the Contribution Caps may be liable for additional tax on the excess contributions.

Fund-capped contributions limit

Your SMSF can't accept single contributions that exceed a member's fund-capped contribution limit. This limit depends on the member's age at the start of the financial year:
Member aged 65 or over but under 75 on 1 July
The fund-capped contribution limit is the non-concessional contributions cap for that financial year.
Member aged 64 or under on 1 July
The fund-capped contribution limit is three times the non-concessional contributions cap for that financial year.

Fund-capped contributions do not include:
Personal contributions that your member advises they intend to claim as an income tax deduction
Contributions from a structured settlement or personal injury payment (the member or a legal personal representative should have notified you that they would make this contribution)
Super co-contributions.

Your fund must return the excess amount within 30 days.

Concessional Contributions

Concessional contributions are contributions made into your SMSF that are included in the SMSF's assessable income. These contributions are taxed in your SMSF at a ‘concessional’ rate of 15%, which is often referred to as ‘contributions tax’.

The most common types of concessional contributions are employer contributions, such as super guarantee and salary sacrifice contributions. Concessional contributions also include personal contributions made by the member for which the member claims an income tax deduction.

Concessional contributions are subject to a yearly cap.

From 1 July 2017, the general concessional contributions cap is $25,000 for all individuals regardless of age.

For the 2014–15, 2015–16 and 2016–17 financial years, the concessional contributions cap is $30,000 per financial year and will be temporarily increased to $35,000 for members aged 49 or over.

For the 2013–14 financial year onwards, excess concessional contributions are no longer subject to excess contributions tax. If a member's contributions exceed the cap, the amount will be included in the member's assessable income and taxed at their marginal tax rate.

Non-Concessional Contributions

Generally, non-concessional contributions are contributions made into your SMSF that are not included in the SMSF's assessable income. The most common type is personal contributions made by the member for which no income tax deduction is claimed.

For the 2014–15, 2015–16 and 2016–17 financial years non-concessional contributions are subject to a yearly cap of $180,000 for members 65 or over but under 75 or $540,000 over a three-year period for members under 65.

If a member’s non-concessional contributions exceed the cap, from 1 July 2014 a tax of 47% is levied on the excess contributions. Individual members are personally liable for this tax and must have their super fund release an amount of money equal to the tax.

Non-concessional contributions also include excess concessional contributions for the financial year. They do not include super co-contributions, structured settlements and orders for personal injury or capital gains tax (CGT) related payments that the member has validly elected to exclude from their non-concessional contributions.

From 1 July 2017, the non-concessional contributions cap is reduced to $100,000 for members 65 or over but under 75. Members under 65 years of age will have the option of contributing up to $300,000 over a three-year period for members depending on their total superannuation balance.

The contribution and bring forward available to members under 65 is outlined in the following table.

Total Superannuation Balance Contribution and Bring Forward Available
Less than $1.4 million Access to $300,000 cap (over 3 years)
Greater than or equal to $1.4 million and less than $1.5 million Access to $200,000 cap (over 2 years)
Greater than or equal to $1.5 million and less than $1.6 million Access to $100,000 cap (over 1 year)
Greater than or equal to $1.6 million Nil

The Total Superannuation Balance is determined on 30 une of the previous financial year.

Transitional arrangements apply to individuals who brought forward their non-concessional contributions cap in the 2015–16 or 2016–17 financial years.