Busoli said that despite the roll out of payday super, a timing gap continues to offer powerful tax‑planning opportunities.
“This is the month to consider contribution reserving or, more correctly, deferred allocation of contributions,” Busoli said.
“Subject to the SMSF deed, a contribution is not required to be allocated to a member account until 28 days into the following month so a contribution made in June may be allocated to a member no later than 28 July.”
He added that the tax deduction, if applicable, is taken in the financial year in which the contribution is made but the allocation against the member’s account, and contribution cap, is not made until the year of allocation.
“Importantly, payday super does not affect the strategy as SMSFs are excluded from the relevant requirements,” he said.
For SMSF members wanting to maximise a tax deduction in one year due to an event such as a large one-off capital gain, deferring allocations is a useful strategy, Busoli continued, and can also be beneficial for a member who may not be eligible to take a tax deduction next year due to work test requirements.
“This is because the deduction depends on eligibility in the year of contribution, not the year of allocation,” he said.
“The opportunity applies to employer and personal contributions and is irrespective of whether they are concessional or non-concessional, though the mechanics differ.”
He said the ATO can be proactively informed of deferred concessional contributions using form NAT 74851.
“Non-concessional contributions are not as straightforward as there is no standard method to advise the ATO of the situation in advance,” he said.
“The member needs to write to the ATO requesting the reallocation. Alternatively, the contribution will result in an excess determination being issued by the commissioner which must be resolved by explaining, with appropriate evidence such as deed wordings and minutes, that reserving has taken place.”
He warned that this process should only be used if trustees are fully aware and in agreement.
“Though the ATO has been inconsistent with its approach, it is not wise to mix contributions where some are to be allocated in the year of contribution and some, the year after. This is particularly relevant where an in-specie contribution is concerned,” he said.
“Remember that the member’s available contribution cap for the following year will be reduced by the amount used and, also, that the allocation is sensitive to the caps that apply in the year of allocation.”
He explained that a deferred non-concessional contribution would be excessive when allocated in July if the member’s total super balance at 30 June 2026 was $2.1 million.
“Be careful here. Though the deferred contribution is not allocated until July for member account purposes, it is counted in the member’s total super balance in the year of contribution,” he said.
“Conversely, a deferred concessional contribution made this June could be for the cap amount that will apply next financial year, $32,500.”
