Q: After completing my personal tax return my accountant advised I was up for $45,000 in income tax – (I had ceased work and sold an investment property, then unexpectedly recommenced work). My question to you is: Can I now make a contribution to my SMSF to reduce the income tax payable personally, that is, making the contribution this tax year for last tax year? And secondly, how would I calculate the optimum amount? I am 58 years of age.
Generally speaking, it is not possible to make super contributions in a current financial year to represent contributions for a previous financial year. In certain circumstances, the ATO does exercise discretion and sometimes allows contributions to be reallocated, but only for ‘special circumstances’. Note that, generally speaking, tax management strategies undertaken for a financial year, after a financial year ends, are not considered ‘special circumstances’.
We are an information site rather than an advisory site, so you will need to confirm with the ATO, or your accountant, the impact of any strategies that you are considering.
On a related matter, where individuals wish to ‘pre-pay’ contributions in one year for the next financial year, to maximise the tax deduction in the earlier financial year there may be an opportunity: see ATO Tax Determination T2013/22.
You also mention the strategy of reducing potential CGT by making super contributions. I explain this strategy in the following articles:
- Managing CGT with super contributions
- Capital gains: Reducing tax via super contributions
- Know your super limits: Reducing CGT via concessional contributions
For general information on concessional (before-tax) contributions, see SuperGuide article Super concessional (before-tax) contributions: 2017/2018 survival guide.