Self Managed Super fund account

Again thanks muchly for the support. (did a search and couldn’t see the answer)

I have contributed a lump sum to the self managed super bank account.
How do I record this in Manager as an incoming amount?

It is an incoming contribution from my un-linked personal account.


Assuming that you have set up your self managed super fund as a Manager business.
Receive Money with the Account being a BS Liabilities account in the name of the Contributor.

In the Cash Accounts tab, click Receive Money. Select the super bank account and record the transaction. The challenge will be to decide what account to allocate the transaction to. Tax law will have some influence on this. Normally, contributions from personal funds need to go into some type of capital or equity account. It seems unusual to contribute outside money to a super account. A more usual approach is that company money goes to this account on behalf of the employee. But I don’t know where you are or what laws and regulations might apply.

Are you sure this is actually a company expense?

Not a company expense
Work as independent contractor/sole trader and have my own self managed super fund set up as a trust eg "mysf pty ltd as t/f for harryfam superannuation fund"
I can legally contribute up to 30K per year as a personal contribution in Australia.

I don’t work as an employee anywhere.

I did set it up as a manager business but set up a BS Asset and called it “Personal Super contributions” and put it in there.
Is this wrong then?
Why is it a BS liability??

The contribution would be an superannuation asset in your personnel accounts but a liability in the super fund accounts as the bank deposit is a cash asset of the super fund. It is a liability as those funds are only being held in trust on your behalf and at some point in the future the super fund will “owe” the funds back to you.

As you have correctly pointed out the super fund structure is a trust, therefore any contributions wouldn’t be equity or capital and any trust earning would be re-distributed and shared amongst the contributors.

That seems confusing.
The Superfund owns shares and properties and earns rent and interest.
The contributions were used to buy the shares and pay for the deposit on the loan for the property, BAS’s are done quarterly.
I set up the super account as a working independent business in It has income, expenses and a property loan.
The income generated from rents and dividends add to income/profit.
It seems odd to make the biggest source of income to the Superfund a liability. Although I see your point that technically it is as the funds will need to be returned (but not for another 20yrs!)
I have not set up my personal accounts in manager as I have no need to.
If I choose to account for the superfund as a separate business entity. Would the contributions be best put in as an asset?
When I import my bank statements the statement is identical to a non super business.

(I am seeing the bookkeeper next week but would love to be well armed)

Contributions are NOT income, they are an advancement of funds which allows the superfund to invest in other assets/sources of income. The superfund is nothing more then an alternate form of Investment Company, contribution to an investment company would be capital not income.

Question, if it is income, how can it be Asset. Assets are debits and incomes are credits

If you made that contribution (deposit) to a bank, those funds wouldn’t be income to the bank but a liability as the bank will need to repay you.

Yes, any deposits to the bank account is debited (asset) and the contra has to be a credit, either a liability or income account.

The funds contributed enabled the super fund to purchase income producing assets, the funds weren’t income to purchase income.

Correct, just like a bank deposit, or purchase of debentures etc

I think the situation is, as the super fund is yours and the contributions are yours you are seeing them both as assets, but once you pass the funds to the super fund they are no longer yours directly - but an advance you have made to an independent entity who purchases shares, property etc on your behalf, but not in your name.

You should enter the contribution of $30,000 under an income account in your Self Managed Superannuation Fund named Member’s Contributions. The super fund will be liable to pay tax at the rate of 15% on the contribution which is within the general concessional contributions cap.

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Wouldn’t those payments be an after tax contributions - as the income has already been taxed before the contribution was made. Or is the general concessional contribution a tax deduction within the personal tax return, therefore incurring the superannuation tax rate.

I assumed that use of term “lump sum” implied an after tax contribution rather then as a sole traders “salary sacrifice” contribution

Sole trader so I don’t get a Salary.
The contribution is Pre-tax , My sole trader business does pay a quarterly PAYG on my BAS based on the previous years return.
The Contribution is a deduction on my income tax calculation at the eofy is my understanding of it.
As a sole trader/indpt contractor the contribution to super is optional. Some years I contributed nil. Other years the Maximum according to how much Tax would be saved and how much equity I needed outside of super.

Contributions are income to the SMSF and are taxed at the rate of 15% to the SMSF. Under double entry accounting the contribution has the effect of increasing the SMSF bank account which is the Debit entry and the corresponding Credit is to the income account.

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That seems to make sense and makes my Super Fund accounting cleaner., Will ask the book keeper to confirm next week.

I am basically treating the super funds account as a normal functioning independent business.
It receives an income from various sources -primarily commercial rent, Does a BAS and does a quarterly PAYG payment.

How would you account for the PAYG payment ?
I have set i up as a “tax on earnings” account in the Equity section and accounted for it here and the GST part of the BAS payment is put to the Tax Liability account in the the Liabilities section.
Is this correct?

The PAYG Installments should be allocated to a liability account named - Provision for income tax. You will also use this account to calculate the income tax payable for the year. The amount payable will be offset by the installments, resulting in the actual balance payable the ATO.

You should also rename the Tax Liability account to GST payable to avoid confusion.

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That’s great thanks.

How should I account for EOFY tax refund or Tax payment made for previous financial yeat?
Cheers for your valuable time.

They can be posted to the provision for income tax account.

That is what thought was likely. My only issue is that the accounts start from this financial year but the refund I got was for last financial year. Do I just do a starting negative balance for the amount owed by the Tax office?
Also when doing a full financial year review won’t the refund not reflect this financial years payments only to the ATO but be a mix of last years refunds and this years payments?

Yes you start with a negative balance. Last years refund along with this years payments are all transactions that give you the result of how much is owed to the ATO after your accountant enters the tax payable for the current year based on the income tax return.

So money in his SMSF Bank account is a liability because it is owed to the contributor of the funds. Does that also mean that all the shares, property etc that are held by his fund are also liabilities (because they are ultimately owned by the contributor?

No, the superfund is a separate legal entity therefore cash, shares property etc are assets of the superfund.
The contributor has “loaned” the funds to the superfund to buy those assets and at some point the “loan” gets repaid by selling the assets.

No different to an investment business, gets a loan from the bank to buy assets and the bank gets repaid when the assets are sold.