Contributions by Cheques and other Negotiable Instruments

A contribution by cheque or other negotiable instrument (eg promissory note) will be taken as a contribution on physical receipt by the trustee of the cheque or instrument subject to the following rules:

• If the cheque or instrument is dishonoured – no contribution will have been made.
• Post-dated cheques – the contribution will only be treated as being made once the cheque can be banked (a post-dated cheque cannot be banked before the date shown on the cheque).
• If the cheque is from a related party of the fund (eg member) then the cheque must also be presented within a commercially reasonable time of the cheque being eligible for banking.
• Future-dated promissory note – the contribution will only be treated as being made once the payment date has been reached.

If the promissory note is issued by a related party then the note must also be presented for payment within a commercially reasonable time from the payment date of the note.

Comment:  The prospect of a member seeking access to 2008/09 concessional contribution caps by means of a cheque or promissory note which is dated after 1 July 2009 will be ineffective.