Advisers and trustees have been warned to make contributions to their super funds well in advance of the end of the financial year as a quirk of the 2019 calendar could mean they may be incorrectly allocated to the wrong financial year and unable to be changed, an SMSF technical expert has said.
The word of caution came from Smarter SMSF chief executive Aaron Dunn as part of a webinar in which he reminded participants the end of the financial year would fall on a weekend this year and may cause delays with contributions being cleared by a bank and thus appropriately allocated to a fund.
“June 30 falls on a Sunday this year and what that means is you need to be very cognisant of the fact that if you don’t get money in on time, there is very little discretion for the amounts to be reallocated back to the previous year,” Dunn said.
He pointed out any contributions banked on the last Friday of the current financial year – 28 June – may not clear until 1 July and would be considered by the ATO to be a contribution for the 2020 financial year.
Referencing the case of Liwszyc vs Commissioner of Taxation (2014), in which a super fund member had a concessional contribution allocated to their fund after the end of the financial year due to bookkeeping errors, he said “the ATO commissioner has very little discretion to reallocate amounts not credited before the end of the financial year”.
“Plan accordingly to ensure the money comes in … and is banked promptly so that it reflects on the member information for concessional contributions for this year,” he warned.
