SMSF members who want to reallocate a contribution after their fund has lodged its annual return should avoid doing so, even via a tax agent, as it will be considered a false declaration.
Heffron head of education and content Lyn Formica said fund members may seek to reallocate a contribution when they realise it was made incorrectly and this can have negative consequences for them.
Speaking during a recent webinar, Formica gave the example of a husband who made a non-concessional contribution of $330,000 to their SMSF in the 2024 financial year and then lodged the fund’s annual return.
After this, the member discovered they had inadvertently triggered their bring-forward period a year earlier and some of that non-concessional contribution was now an excess.
“The husband went to the accountant and asked them to amend the fund’s financial statements to record that the non-concessional contribution was for their spouse to avoid having an excess,” Formica said.
“Is the accountant permitted to amend the financial statements and tax return to change the allocation of the contribution?
“My answer would have been no. At Heffron, we would not have amended those financial statements and tax return for that particular client.
“My concern would be if we allowed that to happen, then the client is making a false and misleading statement.
“I don’t think it is ethical to make out the husband had always intended for that to be a contribution to his spouse’s account.
“The only reason he’s asking for it to be reallocated and be treated as a contribution for the wife is that he is unhappy with the consequences of making a contribution for himself because he has triggered an excess for him.
“Given it was always intended to be a contribution for the husband, it is way too late now to be changing his mind.
“I would be concerned that the client could be penalised and the tax agent could also be penalised for making a false and misleading statement.
“Be very cautious if you are amending allocations of contributions to something other than what the clients originally had intended.”
