Many SMSF trust deeds make provision for contribution reserves to enable this practice. SMSF members often make these arrangements to allow contributions to be recognised for income tax deductibility and other purposes in year 1, while being excluded from their concessional contributions cap until year 2.

The ATO’s Taxation Determination TD 2013/22 validates this strategy under the tax and super laws provided all legal pre-requisites are met.

The form is known as a Request to adjust concessional contributions, and the ATO noted that because the SMSF annual return does not make provision for this strategy to be implemented, use of  the new form is important for taxpayers wishing to apply this strategy effectively. It is recommended that the form either be lodged with or before the fund’s SMSF annual return and the member’s own individual tax return.