I previously mentioned an intriguing case where the 3 year NCC bring forward had been triggered by an ATO auto truncation of a personal concessional contribution containing 36 cents.

In the 2024 year, a member received employer contributions of $6,576.64 and made personal deductible contributions of $20,923.36 – a total of $27,500. The member also made a non-concessional contribution of $110,000 with a view to using the 3 year bring forward rule in the following year. This would have been fine if the $27,500 concessional contribution had been sourced exclusively from employer contributions OR personal concessional contributions, but the combination has caused an issue as it involved cents.

The ATO will only process personal concessional contributions in whole dollars. Where cents are involved, they truncate the amount, so the personal deduction became $20,923 reducing the total allowable deduction to marginally below the $27,500 allowable cap. This wouldn’t have been such a big deal if that’s all that happened, but it wasn’t. The ATO website states that a deduction can only be claimed in whole dollars and, if you make a personal contribution in dollars and cents, “the residual cents will remain a non-concessional contribution and will count towards the relevant cap.”

The result was that the member’s 3 year bring forward strategy was unintentionally triggered as they were regarded as having made a non-concessional contribution of $110,000.36 in 2024.

The fund’s accountant, in the absence of any published ATO comment on the issue, applied successfully to the ATO to have this rectified using the de minimus rule. Interestingly the ATO did not issue any correspondence, but the tax agent portal now shows:

• Concessional contributions – $27,499.64 (unchanged)
• Non-concessional contributions – $110,000.00 (removing $0.36 from the original figures and thereby keeping the client within their cap).
• Bring forward arrangement – not triggered.

A great result and full kudos to the tax agent in dealing proactively with this before the planned contribution triggered an excess contribution response.

This example also underlines the importance of making member data available to financial planners and SMSF administrators. In this case the tax agent, also acting as personal tax accountant for the client, was proactive and able to efficiently access this information and institute rectification. Not all tax agents are this diligent.