When making a downsizer contribution, personal injury payment contribution or a contribution under the lifetime CGT cap, there is a requirement to submit a form to the superannuation fund on or before the date the contribution is made.
If the form is not lodged in time, the contribution may count against the non-concessional contributions cap or be unable to be accepted by the fund.
Types of contributions
A form must be submitted on or before making the following types of super contributions:
- Downsizer contributions
- Personal injury payment contributions, and
- Contributions under the lifetime CGT cap
Each contribution has its own unique eligibility rules which must be satisfied. For more information on the eligibility criteria, please refer to our FirstTech Super and Retirement Income Streams Guide.
Purpose of the form
In order for the contributions listed above to count towards their respective contribution limits or caps and be excluded from the non-concessional cap, the client must complete the relevant form and give it to the superannuation fund on or before the date the contribution is made.
Failing to use the form
Where the form is not provided or is provided after the contribution is made, the ramifications are similar across all three types of contributions.
If the contribution can be accepted as the client was under 75[1] the ramifications of not submitting the form on or before the date the contribution is made are:
- Contribution is reported as a personal contribution
- Client may be able to claim a tax deduction if submitting a valid deduction notice (if the client is age 67 or over they must satisfy the work test or work test exemption)
- If no deduction is claimed, the personal contribution counts towards the non-concessional contributions cap
Forms
The relevant forms are available on the ATO website however it is not compulsory to use the ATO version of the form. Superannuation funds may create their own form for members to use.
The ATO version of the forms is:
- Downsizer contribution (NAT 75073)
- Personal injury payment contribution (NAT 71162), and
- Capital gains tax cap election (NAT 71161)
[1] Includes the period up to 28 days after the end of the month in which the member reaches age 75
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Disclaimer
The information contained in this update is based on the understanding Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) has of the relevant Australian laws as at the article date. As these laws are subject to change you should refer to our website at www.cfs.com.au or talk to a professional adviser for the most up-to-date information. The information is for adviser use only and is not a substitute for investors seeking advice. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person, including AIL, nor CFSIL, accepts responsibility for any loss suffered by any person arising from reliance on this information. This update is not financial product advice and does not take into account any individual’s objectives, financial situation or needs. Any examples are for illustrative purposes only and actual risks and benefits will vary depending on each investor’s individual circumstances. You should form your own opinion and take your own legal, taxation and financial advice on the application of the information to your business and your clients.
Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.
AIL and CFSIL are also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.