If a contribution is received by an SMSF in June of a Financial Year, then the SMSF Trustee can make an election to allocate the contributions to a specific Member in the next Financial Year subject to meeting certain requirements. Trustees can reserve Concessional Contributions within 28 days after the Contributions have been received in an SMSF.

To implement Contributions Reserving, the SMSF Trust Deed must include provisions to enable this. The Trust Deed used by Superannuation Warehouse allows Trustees to implement Contributions Reserving.

The reserved Contributions are reported to the ATO in the SMSF’s tax return in the receiving year and subject to the 15% Contributions tax in the same year.

For Personal Concessional Contributions, the Tax Deduction must be claimed in the Personal Tax Return in the receiving year. A copy of the ATO Tax Deduction form is required to be provided as part of the Annual Compliance process.

However, the Contributions will only count towards the Concessional Contributions Cap in the next financial year in which the Contributions are allocated to your Member account.

The SMSF tax return does not make provisions for Contribution Reserving automatically. To notify the ATO of Contribution Reserving, thereby allowing the ATO to apply the Concessional Contributions Cap for both years correctly, you must complete the ‘Request to adjust Concessional Contributions form’.