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Hi SMSFAAA Team,
A fund was established in July 2020 and I am auditing 2021 year. One of the member has a total of $51,810 concessional contributions ($14,220 employer & $37,590 personal).
Could you please advise how it works regarding the carry-forward concessional contributions in this case?
As it is a new fund, there is no carry-forward concessional contributions? Or should I ask a declaration of how much contributions was made in the 2019 & 2020 years in their super fund to see if there is any carry-forward concessional available in their SMSF for 2021?
Please let me know. Thank you very much in advance.
Yours Sincerely
Jean Rey
Hi Jean
From 1 July 2018 an individual can carry forward unused CC’s if their Total Superannuation Balance (TSB) is less than $500,000. The unused contributions can be carried forward for 5 years and the first year that this provision can be used was in the 2019/20 year.
Yes if a member had unused CC's they can be made to any Fund.
My view from an accounting / audit perspective is that the contributions are taxed at 15% if they are concessional contributions. It is arguably not an audit role to consider if there are unused CC's that can be used. If the member exceeds their CC cap they will receive correspondence from the ATO. It is similar to Division 293 tax in that the auditor does not normally consider if the member is a high income earner & that there may be extra tax applied to the contributions (& paid for by the Fund).
Thanks
SMSF AAA
Regarding my previous query, I got confirmation that the members had carry-forward concessional contributions balance available from their previous fund (Equipsuper). So I guess they can use the available balance in the new SMSF. Please let me know if I am incorrect.
Yours Sincerely
Jean Rey