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ATO, Superannuation

Angst over concessional cap records

concessional contributions

ATO record-keeping with regard to unused concessional contributions caps that can be carried forward is still causing worry among SMSF tax agents.

The mechanisms and records used by the ATO to monitor unused concessional contributions caps that are eligible to be carried forward remain a concern for tax agents as they enter the first financial year end where the new rules can be acted upon.

The worries were raised during a presentation about the current state of contributions in the SMSF sector at The Tax Summit hosted by The Tax Institute in Sydney today.

The angst, as explained by one delegate, centres on the accuracy of the ATO’s contribution records and how the information stored will allow the regulator to recognise a $40,000 concessional contribution made in 2019/20 contains $15,000 worth of carried-forward unused concessional contributions from previous years.

“We know more than they do half the time and I don’t want to be getting any nasty letters to say you’ve got an ECC (excess concessional contribution) because [the ATO] didn’t know the individual had unused concessional contributions in their kit,” the summit attendee said.

Session presenter Accurium head of technical services Melanie Dunn admitted there will be some issues regarding the take up of this measure.

In particular, Dunn noted there would definitely be a lag in the regulator’s record-keeping due to the multiple avenues it will be using to garner the necessary information, such as returns from SMSFs and the personal deductions claimed from super contributions contained on the individual member’s tax returns.

However, she was unable to share any more recent information on the ATO’s approach to its compliance activities in this area.

“The tax office does disclaim this everywhere that their information may not be 100 per cent up to date and the general advice that they’ve given so far is that it’s on the individual – it’s on the trustee to know [the contributions] they are eligible to make,” she said.

It was reported in September last year that the ATO is planning to provide information on the amount of unused concessional contributions an individual has available to use on its tax agent portal.

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