SMSF Technical Education & Strategies

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Contribution splitting for SMSFs

Contribution splitting refers to the splitting between you and your spouse of concessional contributions (i.e. mainly employer contributions or personal contributions that you are able to claim a tax deduction for) that have been received into your member account in your SMSF.

The key issues around contributions splitting are:

 - Contributions can be split after the end of the year and at any time up to the end of the following year. e.g. any employer contributions that were made in the 2008/2009 year may be split by the receiving member at any time up to 30 June 2010.

 - You cannot transfer/split funds to a spouse who is already retired. That is, if they have reached age 55 or over, and do not intend to ever work (at least part time) ever again

 - If the contribution is made by an employer or yourself where you are self employed, and a tax deduction is claimed, then only 85% of the contribution can be split. This is due to the assumption that the contribution will form part of the assessable income of the fund and be taxed at 15%.

 - You must ensure that the trust deed of the SMSF allows the splitting of contributions, as it is not mandatory of a super fund to offer splitting to members.

 - Non concessional contributions (such as personal contributions where no tax deduction is claimed) can not be split with a spouse.