• ## 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. Her account balance on 1 July 2017 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 2018, Julie makes a non-deductible personal contribution of \$100,000. This brings the value of her super interest to \$150,000, with a tax-free component of \$110,000.

In June 2018, 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 – Tax components

Using the proportioning rule, Julie calculates the tax-free component of her \$60,000 rollover as the ‘Rollover amount’ multiplied by the result of the ‘Tax-free component of her super interest before the rollover’ divided by the ‘Value of her super interest before the rollover’, that is:

\$60,000 × (\$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

 Tax-free component \$44,000 Taxable component: Element taxed in the fund \$16,000 Element untaxed in the fund

Julie also needs to calculate how much of her personal contributions made in the 2017-18 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 the ' Tax-free component of the remaining interest' multiplied by the result of the ' Contribution made in the same financial year as the rollover' divided by the ' Tax-free component of her entire interest before the rollover', that is:

\$66,000 × (\$100,000 ÷ \$110,000) = \$60,000

### 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 report on the SAR details of the contributions made in the 2017-18 financial year and rollovers. In section F of the SAR at label B 'Personal contributions', Julie reports \$100,000.

At the same time, Julie will need to include at section F label Q 'Outward rollovers and transfers' of \$60,000.

 Opening account balance \$50,000 Label A – Employer contributions Nil Label B – Personal contributions \$100,000 Label N – Total contributions \$100,000 Label O – Allocated earnings or losses Nil Label P – Inward rollover amounts Nil Label Q – Outward rollovers and transfers \$60,000 Label R – Benefit payments and code Nil Label S – Closing account balance \$90,000