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Alain St Flour

May 25, 2023

Personal non concessional contributions withdrawn in the same financial year

in SMSF Technical Forum

A Trustee transferred $110,000 into the SMSF account from the Member's personal account on 3 March 2022 with the description “SUPER.” The working papers show this as a personal non-concessional contribution. Withdrawals of $40,000, $50,000 and $20,000 were made on 29/5/2022, 30/5/2022 and 4/6/2022 respectively as transfers back to the member's personal account.

The transactions do not appear on the GL or the financial statements. The SMSF is in accumulation phase. The Member was 60 at 30 June 2022 and has not met a condition of release.

The trustee has been asked for an explanation and the circumstances but has not provided a response other than that the deposit transaction was cancelled.

Should a contravention be lodged? I have noted a previous post where the amount was repaid after 9 months.

1 comment

Comments (1)

THE AUDITORS INSTITUTE

May 26, 2023

Hi Alain

Thanks, on face value it appears that a contribution has been made in accordance with the legislation.

Further as the member has not met a condition of release, they have breached SIS re:

1) SIS Reg 5.08 - minimum benefits not maintained

2) SIS Section 65 - financial assistance provided to a member

3) SIS Section 62 - breach of sole purpose test (benefits paid prior to retirement)

Based on the above the compliance audit report should be qualified and an auditors contravention report (ACR) lodged.

If the amount was deposited due to an administrative error and then refunded this may not require a qualification / ACR. Your example appears to be a contribution and then a change of mind so would be hard to argue it is an administrative error.

If other forum members have a view please let the forum know.

Thanks

SMSF AAA