Q&A: Do we need to use the proportioning rule when rolling over super benefits from an SMSF to an industry super fund?

Q: Sally manages her own SMSF, of which she is the only member. The fund is in the accumulation phase and is made up of one third tax free component and two thirds of taxable component. She decides to transfer only part of her benefits rolling over to an industry superfund. Can she elect to transfer money from one component only, for example, from the taxable component, or is she obliged to use the proportioning and indicate in the rollover statement one third tax free and two thirds taxable components. I could not find any unequivocal authority setting up this particular matter.

A: So, this comes back to the very basis of the super reform measures around accessing benefits proportionately. We can’t cherry pick tax components. We can’t say, just roll over my tax free or just roll over my taxable. That would be so good if we could do that. The tax planning would be fantastic. But unfortunately, no, we can’t.