Process for making tax deductible contributions
As many employees will not have been through this process before, it is important to note the process that must be undertaken.
Firstly, you will need to make your super contributions before 30 June 2018 if you want to ensure they are counted towards the 2017/18 contribution cap.
As a general guide, a super contribution is made when it is received by the super fund. For example, you are contributing electronically via BPAY, the contribution is deemed to have been made when the funds are credited to the super account, not the day you make the BPAY transaction. Individual super funds will also have specific requirements and deadlines that need to be taken into account when making super contributions towards the end of the financial year, which they will usually have published on their websites. If you have an SMSF, you should consider timing your transfer to ensure it will be received in your account by 30 June.
Notice of Intent form
In addition, you will need to lodge a ‘Notice of Intent’ form with your super fund by the earlier of:
the date your tax return is lodged for the year the contribution was made, or
the end of the financial year following the financial year in which the contribution was made.
Your fund cannot accept a Notice of Intent if:
you have exited the fund (e.g. rolled over your funds to another super fund, or withdrawn them), or
the contribution(s) being claimed have been paid out as a lump sum or used to start a pension, or
you have submitted a spouse contributions-splitting application (that hasn’t been rejected by the fund).
This Notice of Intent is critical to ensuring you can claim a deduction for your contribution, so if you have any questions about how it operates, contact your super fund or your financial adviser.
Claiming a deduction for personal contributions to super may not be for everyone, and it’s worth noting that salary sacrifice may still be a more attractive strategy for many people. The good news is that as you can make a contribution under these rules at any time up to 30 June, so you have time to seek advice and ensure your affairs are in order to make the most of this new opportunity.