Q: I put money into my SMSF in June 2018 from a capital gain. I wasn’t able to tell the fund at that time what it was because my accountant hadn’t completed the figures so that notice was sent to them in August 2018. As I understood the rules, so long as the money was in the fund at June 2018, I could then withdraw any of it the following month (and did). I am over 60 and retired. I now have been told that the money not only had to be in the fund in the year the gain was made, but had to stay there until the fund actually received the Section 82AAT (1A) notice. Can you confirm?
Unfortunately, timing is very important when claiming a tax deduction for super contributions, and when starting a pension.
An individual must complete and lodge a Notice of intent to claim or vary a deduction for personal super contributions and supply it to their super fund BEFORE the individual starts a superannuation income stream/pension, if those tax-deductible (concessional) contributions form part of the pension assets.
The notice is now called a section 290-170 notice (formerly known as Section 82AAT notice).
Important: Note that an individual must lodge this notice with their super fund, and receive acknowledgement from their super fund BEFORE the individual lodges his or her tax return. The trustee (you, when talking about an SMSF), then uses the notice to determine the treatment of the contributions for benefit component purposes, and to report the contributions in the super fund’s tax return.
Background: According to the ATO, an individual must lodge a notice of intent to claim a deduction with their super fund before whichever of the following occurs first:
- the day the individual lodges his or her your income tax return for the year the contributions were made
- the end of the income year after the income year in which the individual made the contributions.
For more information on making tax-deductible super contributions, see the following SuperGuide articles
- Employees can now make tax-deductible super contributions
- Who can now make tax-deductible super contributions?
- Concessional contributions: What form do I use to claim a tax deduction?
- Tax-deductible super contributions: No longer need to meet 10% income test
- Tax-deductible super contributions: Claim no more than your income
- Super for beginners, part 6: Can I make concessional (before-tax) contributions while I am not employed?