From www.heffron.com.au: The recent changes effective from December 2024 allow many SMSFs to allocate reserves without contribution cap checks, but some reserves still require assessment against the non-concessional contributions cap.

To effectively manage these allocations, fund trustees should prepare cash reserves for potential excess payments, minimize associated earnings by lodging returns quickly, and be aware that allocations don’t need to be equitable among members.

Additionally, it is important to note that allocated reserves are part of a member’s taxable component, and trustees are not obligated to add earnings to a reserve.