SMSF trustees need to look beyond cash transfers when assessing whether they are adhering to the annual contributions caps under the new superannuation rules.
“Most of us think of contributions as being cash contributions – money going into a super fund from a bank account or directly from your employer,” SMSF Association head of technical Peter Hogan told the recent Australian Securities Exchange Investor Day in Sydney.
“But a contribution is much more than that so it is important to understand that there are certain things that you can do, which will count towards the new limits.”
Hogan said while the term contribution was not defined in any legislation and in relation to superannuation it can be payment of money to a fund or a transfer of property to a fund.
“Furthermore, the concept of contribution has been developed as the transfer of something of value to an SMSF,” he explained.
“So it can be many things but I suppose the important point to make here is that a contribution doesn’t have to be money.”
Hogan added that the ordinary meaning of contribution was anything that added value to the fund.
“It increases the value of your fund, however that happens – by increasing the value of an existing asset or by shifting value from somewhere else to an asset of the fund, usually by a related party,” he said.