The work test no longer applies for members wanting to make a personal non-concessional contribution up to age 75. If all, or part, of the personal contribution is required to be concessional then the work test must be satisfied at any time during the year. Note that unused concessional contributions, dating back to the 2018/2019 financial year, could make the deduction considerable.

To take a deduction, the member must supply a notice of intent on an approved form.

The notice of intent must be submitted to the super fund by the earlier of:

• the day the member lodges their personal income tax return for the income year in which the contribution was made or
• end of the income year following the income year in which the contribution was made.

Note that the fund cannot accept the notice if the member is not a member of the fund when they provided the notice, they have lodged a contribution splitting request for the contribution or the fund had begun to pay a pension based on all, or part, of the contribution.

Prior to providing the notice, members should consider that a tax-deductible contribution will incur a 15% contribution tax so their taxable income should be sufficient for the contribution to be worthwhile. In addition, any amount claimed that results in a personal tax loss will be disallowed by the ATO and counted as a non-concessional contribution. This could result in an inadvertent trigger of the NCC three year bring forward rule.

Where the notice of intent has already been lodged, but the client decides that they don’t wish to claim the amount they have stated, a notice of intent to vary must be lodged with the super fund before the member’s tax return is lodged.

Under our administration process we ask for confirmation of the nature of personal contributions prior to commencing a pension or completing the fund tax returns. This requires the clearance of unmatched items for which we often require the assistance of the adviser or member. Where members are lodging their personal tax returns earlier than the SMSF, they need to ensure we are provided with the notice beforehand. We will provide an acknowledgement of the notice ASAP.

Essentially, any member seeking to take a tax deduction for personal contributions should not lodge their personal tax returns until they have received a formal acknowledgement that their fund has received a valid notice of intent.