SMSF & non-concessional contributions cap

Discussion in 'Accounting & Tax' started by melbourne171, 13th May, 2022.

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  1. melbourne171

    melbourne171 Well-Known Member

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    The non-concessional contributions cap and bring forward available is dependent on the super balance. However, if SMSF invests in IP, how do we calculate the SMSF balance?
     
  2. Mike A

    Mike A Well-Known Member

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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The test for contributions utilising the carry forward unsused cap is based on the valaue of the fund as reported to the ATO on a market value basis at each reporting date. Each members interest will be based on this. This is based on the 30 June balance of the prior year, Care must be taken for a late lodger smsf fund as the ATO will not have accurate data for the members. They could mistakenly beleive that they have a total super balance at 30 June 2021 of under $500K since the 2021 data will not be updated until lodged.

    eg ABC SMSF has not prepared and lodged its 2021 annual regulatory and income tax return. The draft results indicate a members account balance is $500,010. That member plans making a 2022 catch up contribution of $70,000 in May 2022. This would later be found to be a breach and a excess concessional contribution. The fund may be obliged to repay it and any notional earnings. The member will also face penalty tax etc.
     

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