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Monica Lee

May 22, 2022

Returning contributions

in SMSF Technical Forum

Member deposited extra contributions and it could have excess non concessional contributions as member was used bring forward non concessional contributions cap $300,000 in 2019 year .

Super fund returned the amounts to member in 30 days and prepared resolutions for returning contributions . It seems like this is non complying .. What regulation will be a breach?

3 answers0 replies

Comments (3)

THE AUDITORS INSTITUTE

May 26, 2022

Hi Monica

The ‘Fund-capped contributions’ regulations were repealed from 1 July 2017, so there are 2 possible outcomes as outlined below that I will explain:

As the contribution occurred in the 2018/19 financial year;

1. If the member was over age 65 (& under 75) at the time of the contribution and the trustee determined that he/she did not meet the ‘work test’ at any time during the financial year, then once the trustee became aware of this it would have needed to refund the contribution to the member within 30 days; or

2. If the member was under 65 or was aged over 65 (& under 75) & he/she met the ‘work test’ then the trustee has no legislative power to refund the contribution, ie. with the fund-capped contributions regulations no longer applying the trustee had to accept the contribution. Then the trustee would have to wait until after the member was issued an excess contribution determination by the ATO, he/she elected to have the excess contribution refunded (along with any excess contributions charge/s); and then only after the trustee received a release notice from the ATO could it refund the excess contribution, via the ATO.

Thanks

SMSF AAA