For SMSFs that are in pension phase, ATO ID 2012/47 outlines that all rollovers and contributions made (regardless of the taxable or non-taxable nature of these amounts) are to be include as assessable income for the purpose of determining the available deductions for fund expenses.
TR93/17 states that general administrative expenses relevant to the operation of the fund as a whole can generally be apportioned according to the formula:
Deductions = General administrative expenses x (Assessable income / Total income)
When an SMSF receives amounts transferred from foreign super funds, e.g. UK pension funds, you are to report the amounts as income in that year’s tax return under Label F of Section B.
According to the ATO, transfers from foreign funds or schemes are not exempt from income tax under the exempt current pension income rules.
The following flowchart provides an understanding of how ECPI should be calculated for funds receiving transfers from foreign funds:
About the author
Naz Randeria is the Founder and Managing Director of Reliance Auditing Services. With more than 25 years’ experience in audit and accounting, Naz is an ASIC registered SMSF Auditor, SMSF Specialist Auditor, Registered Company Auditor, and Chartered Accountant.
She is actively involved in the SMSF audit sector and is passionate about sharing audit, compliance and SMSF knowledge with clients, professional colleagues and the wider public.
View Naz Randeria’s full profile
