Peter Johnson, director of Advisers Digest, said even the Tax Office will not process a 290-170 notice if the member claims for more than their taxable income.
“But of course, claiming a tax deduction to take your taxable income below the tax-free threshold just means that you’re going to pay contributions tax, and then you’re going to get the low income super tax offset anyway to offset that so it would all break even in the long run,” he said.
Johnson gave an example of a couple who own a rental property which it was assumed was split 50/50 between the husband and wife and was sold in November 2024.
The wife made a concessional contribution into the SMSF of $36,815 and a non-concessional contribution of $297,970.
The husband put in $35,815 in concessional and $64,185 in non-concessional in November 2024 and a notice of intent was prepared by the financial adviser and signed by the members on the same day.
“The SMSF trustees acknowledged the notices of intent in November 2024 and they prepared the documents for the clients to sign in January 2025 requesting pension commencements from 1 February 2025 as both members are over 65,” Johnson said.
“The SMSF financial statements were prepared up to 31 January 2025 reflecting contributions as above, factoring in tax on concessional contributions. The TBARs were lodged in February 2025.”
He continued that post 30 June 2025 the members approached a tax agent to prepare their 2025 personal tax returns who discovered that the property was, in fact split 99 per cent to the husband and 1 per cent to the wife.
“That wife has minimal income of $1,000 in 2025 and does not need to claim $36,000 as a deduction for personal super contributions. What we’re trying to avoid is the wife claiming a deduction and super fund paying 15 per cent tax on the contribution when she has no personal tax to pay anyway,” he said.
Johnson said the question is whether it is possible to vary the 290-170 form after the TBAR has been lodged, reporting the pensions and member balances, as well as a way to increase the husband’s notice of intent to claim additional contributions to offset his increased share of the capital gain.
“The husband will now have a higher tax bill based on his increased share of the capital gain and he’d like to claim some additional concessional contribution to offset this. The good news is that you can – you can’t vary a 290-170 notice to take it up, but you can vary it to take it down,” Johnson said.
“The wife can vary her 290-170 notice to take it down to zero. However, that would mean, of course, they have provided for the income tax up to January 2025 and now are not claiming that income tax. That just means you’ve got a gain between January and June 2025. That’s one way of treating it, or you simply amend your TBAR because you got the TBAR wrong.”
