In some cases, rounding has been applied to eliminate cents and simplify the calculations.
Julie is a member and a trustee of an SMSF. Her account balance on 1 July 2022 is $50,000. Included in this balance are Julie's personal contributions of $10,000. She has not given a notice of intention to deduct any of these contributions using a Notice of intent to claim or vary a deduction for personal super contributions form (NAT 71121), so they are a tax-free component for income tax purposes.
In March 2023, Julie makes a non-deductible personal contribution of $100,000. This brings the value of her super interest to $150,000, with a tax-free component of $110,000.
In June 2023, Julie rolls over $60,000 to Fund XYZ and leaves $90,000 in her SMSF. When she makes the rollover, her SMSF provides Fund XYZ with an RBS message via SuperStream reporting income tax and contributions information as follows.
Completing the RBS message in SuperStream when the rollover is made
Tax components
Using the proportioning rule, Julie calculates the tax-free component of her $60,000 rollover as the ‘Rollover amount’ multiplied by the result of the ‘Tax-free component of her super interest before the rollover’ divided by the ‘Value of her super interest before the rollover’, that is:
$60,000 × ($110,000 ÷ $150,000) = $44,000
The taxable component of her $60,000 rollover is the remainder of the rollover:
$60,000 − $44,000 = $16,000
|
Tax-free component |
$44,000 |
|
Taxable component: |
|
|
$16,000 |
|
|
Julie also needs to calculate how much of her personal contributions made in the 2022–23 financial year remain in the SMSF after paying the rollover to Fund XYZ and how much was rolled out and so reported on the RBS given to Fund XYZ.
While Julie can calculate the components of her remaining super interest in the SMSF using the same method as above, it is simpler to use subtraction, as follows.
The tax-free component of her interest left in the SMSF is the tax-free component before the rollover minus the tax-free component rolled out:
$110,000 − $44,000 = $66,000
The taxable component is the remainder of her interest – that is, the total in the SMSF after the rollover minus the tax-free component after the rollover:
$90,000 − $66,000 = $24,000
So, the portion of the $100,000 contribution that is still held for Julie in the SMSF after paying the rollover is the ' Tax-free component of the remaining interest' multiplied by the result of the ' Contribution made in the same financial year as the rollover' divided by the ' Tax-free component of her entire interest before the rollover', that is:
$66,000 × ($100,000 ÷ $110,000) = $60,000
Completing the SMSF annual return after the end of the financial year
Prior to completing section F of the SAR, Julie must ensure that she has all the details relating to the contributions that have been made to her SMSF during the financial year, together with the details of any contributions that she has rolled out of her SMSF to other funds on a RBS.
Julie must report on the SAR details of the contributions made in the 2022–23 financial year and rollovers. In section F of the SAR at label B 'Personal contributions', Julie reports $100,000.
At the same time, Julie will need to include at section F label Q 'Outward rollovers and transfers' of $60,000.
|
Opening account balance |
$50,000 |
|
Label A – Employer contributions |
Nil |
|
Label B – Personal contributions |
$100,000 |
|
Label N – Total contributions |
$100,000 |
|
Label O – Allocated earnings or losses |
Nil |
|
Label P – Inward rollover amounts |
Nil |
|
Label Q – Outward rollovers and transfers |
$60,000 |
|
Label R – Benefit payments and code |
Nil |
|
Label S – Closing account balance |
$90,000 |
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