With Self-Managed Super Funds (SMSFs), a contribution is a payment that is made to your fund in the form of money or an asset other than money (specie contribution). If the rules of your fund allow it, your SMSF can generally accept:
- Employer contributions.
- Personal contributions.
- Salary sacrifice contributions.
- Super co-contributions.
- Eligible spouse contributions.
As part of your SMSF obligations, you must document contributions and rollovers and allocate them to the members’ accounts within 28 days of the end of the month in which you received them.
There are two types of allowable contributions: mandated employer contributions and non-mandated contributions. Mandated employer contributions are those made by an employer under a law or an industrial agreement for the benefit of a fund’s member eg. super guarantee contributions. Non-mandated contributions include: contributions made by employers over and above their super guarantee or award obligations and member contributions.
It’s important to remember there are minimum standards for accepting contributions. Whether you can accept a contribution or not depends on:
- The type of contribution – For example, you can accept mandated employer contributions.
- The age of the member – You cannot accept non-mandated contributions from members aged 75 or over.
- Whether the member quotes their TFN.
- Whether the contribution exceeds the member’s capped contributions limit.
In regards to in specie contributions, you must intentionally acquire assets. However, there are exceptions to this rule: listed shares and securities and business real property (land and buildings used wholly and exclusively in a business).
A rollover is when a member transfers some or all of their existing superannuation to your fund. A rollover super benefit from another fund is generally not included in the assessable income of your fund. If it does not contain an untaxed element, you include the amount of the element in the assessable income of your fund. If the un-taxed element exceeds the un-taxed plan cap, the originating fund should withhold tax.
If you require further information about accepting contributions and rollovers, please don’t hesitate to get in touch with the team here at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
