A sector technical specialist has reminded practitioners there is no flexibility regarding the timing of an asset sale for a member who wants to use the proceeds to make a super fund contribution but may have to do so outside the age limit restriction.
The question was raised during an Accurium webinar hosted today in the context of waiting for an optimal time to sell an asset to maximise its market value or dealing with an overly long turnaround time for settlement on the sale.
“They are separate rules. [When] selling an asset…and wanting to make a contribution to the fund, the trustee can’t accept [a contribution] outside of the 28 days after the end of the month when the member turned 75 unless it’s a mandated employer or downsizer [contribution],” Accurium head of SMSF education Mark Ellem noted.
“They’re the only two [contributions outside this age restriction] that can be accepted in respect of an individual – a mandated or downsizer [contribution],” he stressed.
He pointed out this is a consideration members must take into account when faced with this scenario.
“If [the timing of the sale] is not right and you’re waiting for the right sale price, you need to keep [the age restriction in mind].”
Ellem highlighted the same ATO interpretation applies when an individual is looking to take advantage of the small business capital gains tax concessions on the sale of their business.
“If [the member] is selling their business [and is turning 75] and retiring they have got to keep in mind they have to receive settlement proceeds [to allow] the trustee to accept the contribution prior to that 28 days after the end of the month [in which the member reached age 75],” he explained.
“So, there is no flexibility [with the application of this rule],” he concluded.
