The ATO has in place a ruling that can allow a superannuation contribution to an accumulation account made in one financial year to be deemed to “take effect” (that is, allocated to a particular year’s contribution total) in the financial year that follows.
Importantly, the ATO requires a form to be lodged, which serves to notify it that a member of a self-managed superannuation fund (SMSF) has made a concessional contribution in one financial year (year 1) but the SMSF did not allocate this to the member until the next financial year (year 2).
Most SMSFs use provisions in their trust deeds concerning contribution reserves to enable this strategy, commonly referred to as a “contribution reserving strategy”. Typically, SMSF members will have made these arrangements to allow contributions to be recognised for income tax deductibility and other purposes in year 1 while not being counted towards their concessional contributions cap until year 2. […]