Are Deemed Contributions Concessional?

21 May 2024

Written by

David Busoli, Principal

Deemed contributions generally occur when increases in fund value have not been caused by investments or insurance payments. Most commonly this occurs when an expense is paid on behalf of the fund without reimbursement though it can also occur when an asset in the fund is improved by the member without appropriate payment (this may invoke NALI provisions so needs to be considered carefully).

Where the action is attributable directly to a member or their spouse it will be a non-concessional contribution by default. The member can elect for it to be a concessional contribution, subject to eligibility, using the standard notice of intent to claim a tax deduction, if they wish.

If the deemed contribution is sourced from an entity or individual other than the member or spouse, such contributions will count towards the concessional caps of the member to which they are allocated though there can be discretion as to which member’s account is credited. This may occur when a member’s business or some other entity pays fees or charges that should have been paid by the fund.

Keeping you up-to-date with what you need to know about SMSFs. Subscribe to get our updates delivered straight to your inbox.

More SMSF News