• Example 2 - One partial rollover during the year

    Example 2 assumes there are no investment earnings, losses or administration fees. In some cases, rounding has been applied to eliminate cents and simplify the calculations.

    Julie is a member and a trustee of an SMSF, and her account balance on 1 July 2009 is $50,000. Included in this balance are Julie's personal contributions of $10,000. She has not given a notice of intention to deduct any of these contributions using a Notice of intent to claim or vary a deduction for personal super contributions form (NAT 71121), so they are a tax-free component for income tax purposes.

    In March 2010, Julie makes a non-deductible personal contribution of $100,000. This brings the value of Julie's super interest to $150,000, with a tax-free component of $110,000.

    In June 2010, Julie rolls over $60,000 to Fund XYZ and leaves $90,000 in her SMSF. When the rollover is made, Julie's SMSF provides Fund XYZ with an RBS reporting income tax and contributions information as follows.

    Completing the RBS when the rollover is made

    Item 13 - Rollover components

    Using the proportioning rule, Julie calculates the tax-free component of her $60,000 rollover as:

     
    Rollover amount  X

    Tax-free component of her super interest
                 before the rollover             
    Value of her super interest before the rollover

    $60,000  X

    $110,000
    $150,000

    = $44,000

    The taxable component of her $60,000 rollover is the remainder of the rollover:

    $60,000 - $44,000 = $16,000

    Julie completes item 13 'Rollover components' as follows:

    Tax-free component

    $44,000

    Taxable component:

              Element taxed in the fund

    $16,000

              Element untaxed in the fund

     

    Item 15 - Contributed amounts

    Julie also needs to calculate how much of her personal contributions made in the 2009–10 financial year remain in the SMSF after paying the rollover to Fund XYZ and how much was rolled out and so reported on the RBS given to Fund XYZ.

    While Julie can calculate the components of her remaining super interest in the SMSF using the same method as above, it is simpler to use subtraction, as follows.

    The tax-free component of her interest left in the SMSF is the tax-free component before the rollover minus the tax-free component rolled out:

    $110,000 - $44,000 = $66,000

    The taxable component is the remainder of her interest - that is, the total in the SMSF after the rollover minus the tax-free component after the rollover:

    $90,000 - $66,000 = $24,000

    So, the portion of the $100,000 contribution that is still held for Julie in the SMSF after paying the rollover is:


    Tax-free component of the remaining interest


    X

    Contribution made in the same financial year
                 as the rollover             
    Tax-free component of her entire interest before the rollover

    $66,000  X

    $100,000
    $110,000

     = $60,000

    The portion of the $100,000 personal contribution that has been rolled out and which Julie reports on the RBS at item 15 is the total contribution minus the proportion remaining in the SMSF:

    $100,000 - $60,000 = $40,000

    Julie includes $40,000 at item 15, label B 'Personal contributions'. (This amount is also included in the total at label K.)

    Completing the SMSF annual return after the end of the financial year

    Prior to completing section F of the SAR, Julie must ensure that she has all the details relating to the contributions that have been made to her SMSF during the financial year, together with the details of any contributions that she has rolled out of her SMSF to other funds on a RBS.

    Julie must only report on the SAR details of the contributions made in the 2009–10 financial year which remain in the fund after any rollovers. Julie can confirm that the contribution amounts reported on the SAR are correct by subtracting the amount of contributions she reported on the RBS from the total contributions she received in the financial year. Thus, Julie completes the contributions sections of the SAR as follows.

    In section F of the SAR at label B 'Personal contributions', Julie reports $60,000 - as this is the portion of the $100,000 contribution amount that is left in the SMSF after paying the rollover. (The other $40,000 was reported on the RBS at item 15.)

    At the same time, Julie will need to include an adjustment at section F label Q 'Outward rollover amounts' to account for the contributions reported on the RBS. The amount of the adjustment is the total rollover payment minus the contributions rolled out (item 15 on the RBS):

    $60,000 - $40,000 = $20,000

    This adjustment at label Q enables Julie to reach the correct closing account balance in section F 'Member information'.

    Section F will include the following amounts

    Opening account balance

    $50,000

    Label A - Employer contributions

    Nil

    Label B - Personal contributions

    $60,000

    Label N - Total contributions

    $60,000

    Label O - Allocated earnings or losses

    Nil

    Label P - Inward rollover amounts

    Nil

    Label Q - Outward rollover amounts (that is, outward rollovers reported on the RBS at item 13 less contributions reported at item 15)

    $20,000

    Label R - Benefit payments and code

    Nil

    Label S - Closing account balance

    $90,000

      Last modified: 03 Mar 2016QC 25212