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Dawood Hassan

Nov 16, 2023

Non-concessional contribution by the member aged 74 at June 30 2022 without passing the work test

in SMSF Technical Forum

I hope evryone is doing during the busy time. I am currently conducting an audit for a SMSF for the year ended June 30, 2022. This member is aged 74 at June 30, 2022 and the SMSF owned a investment property but it could not be rented out. The member had contributed non conessional contribution to the cover the repairs and maintenance expenses before it can be rented out. The member is retired and did not work hence did not pass the work test for non cncessional contribution.

My query is since he did not pass the work test, do I need to qualify the part B and a lodge an ACR.

Is there any way to treat this funds transferred in diferently. Regards

Dawood Hassan

2 comments

Comments (2)

THE AUDITORS INSTITUTE

Nov 20, 2023

Hi Dawood

Yes the work test rules were amended from 1 July 2022 so no longer had to meet the work test if under age 75.

Yes the contributions should not have been accepted so there is a breach of SIS Regulation 7.04. You would only have to lodge an ACR if the breach met the criteria eg. is more than $30,000.

Possibly you could treat the money transferred in as a sundry creditor to be reimbursed by the Fund. You have to be careful it is not considered a borrowing.

Thanks

The Auditors Institute

Dawood Hassan

Nov 21, 2023

Replying to

Thanks