5th May 2016
Most of the budget measures will not take effect until 1 July 2017. A marked exception is the change to non-concessional contribution caps. This will take effect, subject to the successful passage of the relevant legislation, from 7.30 pm on 3 May 2016.
The new lifetime limit of $500,000, reduced by any such contributions made from 1 July 2007, will be highly relevant to many SMSF members.
Special attention should be taken to any non-concessional contributions where processing might straddle the operative date. This could occur in certain contributions made in specie or by cheque. An in specie contribution is made on the date the trustees receive all the completed documents necessary to effect transfer. For equities or managed funds this will be a completed transfer form. For property this will include all documents required to effect the transfer of title as well. Clearly, where these have been received up to close of business on 3 May, they will not be processed until after this date. In the case of a contribution being made by cheque this will be effective from the date of receipt even if it isn’t banked until later in the week.
In either case, the fund auditor will require evidence to date the contribution correctly so copies of all relevant documentation should be arranged. Where cheques have already been banked a copy should be sought from the receiving bank now. This action will prevent unnecessary audit delays.