• Example 3 - Multiple rollovers during the year

    Example 3 assumes there are no investment earnings, losses or administration fees. In some cases, rounding has been applied to eliminate cents and simplify the calculations.

    John is a member and a trustee of an SMSF, and his account balance at 1 July 2009 is $200,000. Included in this balance are John's personal contributions of $100,000. He 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.

    First rollover

    In March 2010, John makes another non-deductible personal contribution of $95,000. This brings the value of John's super interest to $295,000, with a tax-free component of $195,000.

    In April 2010, John rolls over $60,000 to Fund ABC and leaves $235,000 in his SMSF. When the rollover is made, John's SMSF provides Fund ABC with an RBS reporting tax and contributions information as follows.

    Completing the RBS when the rollover is made

    Item 13 - Rollover components

    Using the proportioning rule, John calculates the tax-free component of his rollover as:


    Rollover amount  X   

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

    $60,000  X

    $195,000
    $295,000

     = $39,661

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

    $60,000 - $39,661 = $20,339

    John completes item 13 'Rollover components' as follows:

    Tax-free component

    $39,661

    Taxable component:

              Element taxed in the fund

    $20,339

              Element untaxed in the fund

     

    Item 15 - Contributed amounts

    John needs to calculate how much of his personal contributions made in the 2009-10 financial year remain in the SMSF after paying the rollover to Fund ABC and how much was rolled out and so reported on the RBS given to Fund ABC. John starts by calculating the components of his remaining super interest in the SMSF either using the same method as above or as follows.

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

    $195,000 - $39,661 = $155,339

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

    $235,000 - $155,339 = $79,661

    So the amount of the $95,000 contribution that is still held for John in the SMSF after making the rollover is calculated as follows:


    Tax-free component of the remaining interest


    X

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

    $155,339  X

     $95,000
    $195,000

     = $75,677

    The portion of the $95,000 personal contribution that has been rolled out and which John reports on the RBS at item 15 is the total contribution minus the portion remaining in the SMSF:

    $95,000 - $75,677 = $19,323

    John includes $19,323 at item 15, label B 'Personal contributions'. (This amount is also included in the total at label K.)

    Summary of reporting on the RBS for the first rollover

    What

    Reported at

    Amount

    Tax-free component

    Item 13

    $39,661

    Taxable component:
    Element taxed in the fund

    Item 13

    $20,339

    Personal contributions

    Item 15, label B

    $19,323

    After the rollover has been made, the balance of John's super interest in the SMSF is $235,000, which is made up of:

    Tax-free component: $155,339

    Taxable component: $79,661

    Additional contributions and second rollover made during the year

    In May 2010, John received employer contributions of $2,000 and made additional non-deductible personal contributions of $45,000. There is a $300 allowance for tax on employer contributions. This brings the value of John's super interest to $281,700 ($235,000 + $2,000 + $45,000 - $300).

    John's super interest is now made up of a:

    • tax-free component of $200,339 (the $155,339 tax-free component in the fund before the contribution plus the personal contribution of $45,000)
    • taxable component of $81,361 (the $79,661 taxable component in the fund before the contribution plus the $1,700 net amount of employer contributions).

    In June 2010, John rolls over a further $80,000 to Fund ABC and leaves $201,700 in his SMSF. When the rollover is made, John's SMSF provides Fund ABC with an RBS reporting tax and contributions information as follows.

    Completing the RBS when the rollover is made

    Item 13 - Rollover components

    Using the proportioning rule, John calculates the tax-free component of his $80,000 rollover as:


    Rollover amount


    X

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

    $80,000  X

    $200,339
    $281,700

     = $56,894

    The taxable component of his $80,000 rollover is the remainder of the rollover:

    $80,000 - $56,894 = $23,106

    So John completes item 13 'Rollover components' as follows:

    Tax-free component

    $56,894

    Taxable component:

              Element taxed in the fund

    $23,106

              Element untaxed in the fund

     

    John calculates the components of his remaining super interest in the SMSF ($201,700) as follows.

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

    $200,339 - $56,894 = $143,445

    The taxable component of his interest left in the SMSF is the remaining interest in the SMSF minus the tax-free component remaining in the SMSF:

    $201,700 - $143,445 = $58,255

    Item 15 - Contributed amounts

    John will need to calculate how much of the $45,000 non-deductible personal contribution and $2,000 employer contributions (made since his last rollover in April 2009) will remain in his SMSF after making the rollover to Fund ABC, and how much was rolled out and so reported on the RBS given to Fund ABC.

    John calculates the portion of the $45,000 non-deductible personal contribution that is still held in the SMSF after paying the rollover as follows:


    Tax-free component of the remaining interest


    X

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

    $143,445  X

     $45,000
    $200,339

     = $32,220

    The portion of the $45,000 personal contribution that has been rolled out which he reports on the RBS is therefore $12,780 ($45,000 - $32,220). John reports $12,780 at item 15, label B 'Personal contributions'. (This amount is also included in the total at label K.)

    Similarly, the portion of the $2,000 taxable contribution that is still held in the SMSF after paying the rollover is calculated as follows:


    Taxable component of the remaining interest


    X

    Contribution made in the same financial year
                 as the rollover             
    Taxable component of John's entire interest before the rollover

    $58,255  X

      $2,000
    $81,361

     = $1,432

    The portion of the $2,000 employer contribution that has been rolled out which he reports on the RBS is therefore $568 ($2,000 - $1,432). John reports $568 at item 15, label A 'Employer contributions'. (This amount is also included in the total at label K.)

    Summary of reporting on the RBS for the second rollover

    What

    Reported at

    Amount

    Tax-free component

    Item 13

    $56,894

    Taxable component:
    Element taxed in the fund

    Item 13

    $23,106

    Personal contributions

    Item 15, label B

    $12,780

    Employer contributions

    Item 15, label A

    $568

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

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

    John must only report on the SAR details of the contributions remaining in the fund after any rollovers. John can confirm that the contribution amounts reported on the SAR are correct by subtracting the amount of contributions he reported on the RBS from the total contributions for the financial year. Thus, John completes the contributions sections of the SAR as follows.

    In section F at label A 'Employer contributions', John reports $1,432 - as this is the portion of the $2,000 contribution amount that is left in his SMSF after making the rollover. (The other $568 was reported on the RBS at item 15.)

    In section F at label B 'Personal contributions', John reports $107,897 - as this is the portion of the $140,000 ($95,000 + $45,000) of contributions that remain in his SMSF after making the rollovers. (The other $19,323 and $12,780 were reported on the RBS at item 15.)

    At the same time, John will need to include an adjustment in section F label Q 'Outward rollover amounts' to account for the contributions reported at item 15 on the RBS. The amount of the adjustment is the amount of all outward rollovers reported at item 13 less the amount of all contributions reported at item 15 on RBS:

    $140,000 - $32,671 = $107,329

    This adjustment at label Q enables John to reach the correct closing account balance in section F 'Member information'. Section F will include the following amounts:

    Opening account balance

    $200,000

    Label A - Employer contributions

    $1,432

    Label B - Personal contributions

    $107,897

    Label N - Total contributions

    $109,329

    Label O - Allocated earnings or losses

    $300 (Loss)

    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)

    $107,329

    Label R - Benefit payments and code

    Nil

    Label S - Closing account balance

    $201,700

      Last modified: 03 Mar 2016QC 25212