Concessional Contribution Strategies
For many couples, particularly where one member is working full time and the other member is only working part time or not at all, a large imbalance of SMSF account balances can occur over time. The strategy of splitting concessional contributions with your spouse is a method to try and address this.
This is a longer term strategy. Its not about trying to get a big benefit now. With the advent of the total super balance limits / and transfer balance caps (currently $1.6 million per person), this strategy is about balancing out those contributions and using up both members maximum limits prior to retirement.
Tom has received $15,000 of employer contributions into his SMSF member account over the 2018/2019 year. He advises his SMSF administrator in the 2019/20 year that he wishes to split this evenly with his wife, who is also a member of the SMSF.
The SMSF lodges a Superannuation contributions splitting application to the ATO in 2019/20, indicating he wants to split $7,500 with his wife.
The trustees of the SMSF can accept the application as the split amount is both less than Tom’s concessional contributions cap, and less than 85% of the $15,000 of employer contributions.
Tom’s SMSF administrator will transfer $7,500 to his wife’s member account.