SMSF TV - Contribution Reserves

Описание: https://www.lightyeardocs.com.au/ Hi, I'm Grant Abbott and I'm principal of SMSF Strategies. Today we're talking about contributions reserves. Now these are not new things. I started talking about contributions reserves way back in 1998 when the superannuation surcharge was first introduced into Australia. It's had a long, long history, went away but then has come back again with the release of obviously the excess concessional, excess non-concessional caps, has really come to the fore. I remember talking about it at a spa conference way back in 2009. In fact it might have even been 2008; the contributions reserves were absolutely crucial for people to get a tax deduction in this current year to maximise or go above their threshold and carry some of the contributions over to the next year.

Since that time, around about two years ago, the Commissioner started looking at it in the National Tax Liaison Group and basically gave a big thumbs-up. In the 2011 SMSF Strategy Day that we did with IFA, I went through all the particular issues around it and we were all quite happy, the contributions reserves are all a-okay from the Commissioner.

Finally the Commissioner has just released an interpretive decision 2012/32, that basically says where you have a contributions reserve -- and the way it works is that essentially we may make a contribution into a fund this year, effectively if it was from an employer or if it's non-concession, if it doesn't go into their members account but goes into a reserve, then effectively if it's parked in that reserve in that instance, it's not going to be caught in their caps that year. It's only when it's allocated. Now division 7.2 of the [SYS] regulations says if you make a contribution during the year, you must allocate it within 28 days after the end of the month in which it has been contributed. So it's not good, say for example, in April or in March making a contribution and putting it up into reserve because you're only going to pull it out in the next year. Really what we're looking at is, around about 30 June, making a contribution reserve, putting money into a reserve, parking it and carrying it over to July. That means we can get a larger assessable amount particularly for this current year, if you've got someone over aged 50, they can get 50, they can't carry over 50, because if they go 50 and they're above their caps next year, they can make 50 and then potentially 75 or a lesser amount. But what will happen is it will all be deductible to the employer or their business or if it's salary sacrificed if they're able to do that, or personal deductible contribution, we're able to do that. Fifty goes into their account, the other 25 gets passed over and goes into reserve and then will be allocated to their account in the following income year. Great for people about to retire, more importantly for people who have actually got a large amount of assessable income over this year.

Absolutely and important and crucial for people who are over $300,000, we know now that in 2012, people who earn more than $300,000, when the money goes into the fund it's going to be up for 30% contributions tax, but if we pull that back to pre-30 June 2012, then effectively we're out and about.

Importantly from that perspective, is how you do a contributions reserve? It really comes down to the documentation. Really what you need to see, if you have a look at the relevant APRA guidelines about reserves, you need to see a separate contributions reserve established. So you need to make sure your deed allows the establishment of a separate contributions reserve. We've always had one inside our SMSF Strategies deed and, secondly, you need to then go and do the documentation. For contributions reserves, you can simply go onto our website, have a look at the products and you will see there you can actually draft as many contributions reserves as you want to your heart's content. So go and have a look at our site, you will also find there's a webinar on how to fill out the form and also a little bit of an expose on what to do for your administration staff if you really want to start to move these contributions reserves at 30 June year end for this year.

Anyway that's Grant Abbott, talking about contributions reserves. Looking forward to seeing you at the #SMSF Strategy Day in July this year.

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