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  • Audit evidence for downsizer contributions

    From 1 July 2018, members of self-managed superannuation funds (SMSFs) aged 65 years or older can make downsizer contributions into their super fund of up to $300,000 from the proceeds of selling their main residence. This is providing certain eligibility requirements are met.

    Checking compliance with the downsizer contribution requirements

    When conducting the fund’s annual audit, approved SMSF auditors need to obtain sufficient and appropriate audit evidence to verify the fund has complied with the downsizer contribution requirements.

    At a minimum, auditors should check for and obtain evidence of the following:

    • the member is aged 65 years or older at the time the contribution was made
    • a tax file number (TFN) for the member has been provided
    • the SMSF trust deed allows the fund to accept a downsizer contributions
    • an approved Downsizer contribution into superannuation form from the member that has been signed and dated. The member can use a form provided by the fund. However, to be in the approved form, it must contain a number of key elements, refer to the Downsizer contribution into super form
    • the contribution was made either at the same time or after the form was received by the fund and the contribution does not exceed the $300,000 cap per member
    • the member has not previously made downsizer contributions to the fund from a previous sale of property
    • the contribution has been correctly allocated to the member's account.

    We don't require auditors to check if a member has met any other downsizer eligibility requirements. They can rely on the member making a correct declaration on the Downsizer contribution into superannuation form.

    For a copy of our form, go to:

    Contributions that don’t meet the eligibility criteria

    Contributions that don't meet the eligibility criteria to be downsizer contributions may still be accepted by the fund as personal contributions for the member. This is provided the contributions satisfy the acceptance of contribution rules in regulation 7.04 of the Superannuation Industry (Supervision) Regulations 1994External Link.

    If the contribution doesn't satisfy the acceptance of contribution rules:

    • trustees are required to ensure the contribution is returned by the fund
    • the contribution must be returned within 30 days of the fund becoming aware that the amount received didn't meet the eligibility criteria (where the SMSF trust deed allows this).

    A contravention of regulation 7.04 occurs where the contribution is not returned within 30 days. The auditor will be required to:

    • report the contravention to us via an Auditor/actuary contravention report (where the reporting criteria is met)
    • notify the trustees via a management letter, and
    • modify Part B of the Self-managed super fund independent auditor’s report.

    For more information on auditor reporting requirements, go to:

    Last modified: 03 Dec 2021QC 67410