AAT does have jurisdiction over excess contributions tax

Administrative Appeals Tribunal (AAT), excess non-concessional contributions tax, Ward and Commissioner of Taxation [2015] AATA 138 (11 March 2015)The Administrative Appeals Tribunal (AAT) has ruled that it does have jurisdiction to decide appeals from taxpayers disputing Commissioner of Taxation decisions not to disregard or reallocate excess non-concessional contributions tax.

In Ward and Commissioner of Taxation [2015] AATA 138 (11 March 2015) the question was raised if the AAT did have jurisdiction over such matters. This was because “the ordinary meaning conveyed by the text of s 292-465(9)(a) of the Income Tax Assessment Act 1997 (the ITAA 1997) leads to a result that is manifestly absurd.” Read more...

Dates and payment methods key to avoid excess contributions

AAT decision, Hope and Commissioner of Taxation [2014] AATA 877, excess contributions, superannuationYet again an Administrative Appeals Tribunal (AAT) decision has shown the importance of dates and payment methods for avoiding making excess contributions to superannuation. This is particularly the case when making super contributions around the end of the financial year.

As described in the case of Hope and Commissioner of Taxation [2014] AATA 877, Mr and Mrs Hope were both directors and employees of their company. Part of Mrs Hope’s responsibilities was as bookkeeper, including payroll and making superannuation contributions. On the 30th of June 2008 $88,000 of superannuation contributions were transferred from the company bank account to the super funds of Mr and Mrs Hope, $42,000 and $46,000 respectively. These payments were made via the MYOB Clearing House using the M-Powered Superannuation system to two different APRA-regulated superannuation funds. However these amounts were received by the super funds on the 3rd and 4th of July 2008. Read more...

Special circumstances for excess contributions tax

Excess contributions tax special circumstancesWhere there have been excess contributions to superannuation an application can be made to the ATO Commissioner for the contributions to be disregarded or reallocated to another financial year, if there are ‘special circumstances’.

The rules for such an application are set out in the Income Tax Assessment Act 1997 (ITAA 97), section 291.465 for excess concessional contributions and section 292.465 for excess non-concessional contributions.

These sections say the ATO Commissioner may make a determination that excess contributions should be disregarded or reallocated where there was been special circumstances and “making the determination is consistent with the object of this Division.” Read more...

Reforming the excess non-concessional contributions tax submission

This is a submission to the recent Treasury department consultation process on reforming the excess non-concessional contributions tax.

Thank you for the opportunity to make a submission in regards to the exposure draft Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014. This submission will address three concerns relating to the exposure draft:

  • Use of the General Interest Charge for calculating associated earnings
  • Potential for tax advantages to be gained under the new rules
  • SMSFs and the time allowed to respond to a release authority
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    Refund excess non-concessional contributions: draft rules

    Refunding excess non-concessional contributionsThe treasury department has released an exposure draft of the new rules for refunding excess non-concessional contributions to super fund members.

    This change was announced alongside the 2014 federal budget. Currently there is an option to have excess concessional contributions refunded, but not excess non-concessional contributions.

    Under the new rules super fund members will have the option of having excess non-concessional contributions refunded, along with ‘associated earnings’. Read more...

    Progress on excess non-concessional contributions changes: SPAA

    refund excess non-concessional contributions, associated earningsAccording to SPAA progress is being made in the consultation process for the changes to allow for the withdrawal of excess non-concessional contributions.

    These changes were announced in the 2014 Federal Budget, and according to the Government statement would mean:

    “If an individual chooses this option [withdrawing excess non-concessional contributions], no excess contributions tax will be payable and any related earnings will be taxed at the individual’s marginal tax rate.

    Individuals who leave their excess contributions in the fund will continue to be taxed on these contributions at the top marginal rate.” Read more...

    Temporary Budget Repair Levy & Superannuation rates

    Temporary Budget Repair Levy - Legislation, Act, BillAnnounced in the 2014 federal budget, the Temporary Budget Repair Levy is an additional 2% tax on individual incomes over $180,000, however it also increases a number of other tax rates. The levy, as legislated, applies for the following financial years:

    • 2014/15
    • 2015/16
    • 2016/17

    The following temporary budget repair levy bills relating to superannuation have now passed both houses of parliament:

    Income Tax Rates Amendment (Temporary Budget Repair Levy) Bill 2014

    Superannuation (Excess Non-concessional Contributions Tax) Amendment (Temporary Budget Repair Levy) Bill 2014 Read more...

    Disregarding Excess Non-Concessional Contributions

    SMSF & Superannuation Rulings, Decisions, Cases and DeterminationsFollowing shortly after the announcement in the 2014 Federal Budget that there would be a change to allow for excess non-concessional contributions could be refunded from an SMSF comes a case from the Administrative Appeals Tribunal (AAT) showing when such a change would benefit SMSF members.

    In the case of Thompson and Commissioner of Taxation [2014] AATA 339 (29 May 2014) the decision asked to be reviews was if the Commissioner of Taxation had acted correctly in not disregarding excess non-concessional contributions. Read more...

    Division 293 Tax on Contributions by High-Income Earners

    Division 293 taxWhat is Division 293 tax?

    Division 293 of the ITAA 97 creates a tax on high income individuals who receive concessional superannuation contributions. Such individuals will have an additional 15% tax rate apply to some or all of their concessional contributions if their income exceeds $ 300,000

    History of Division 293 tax

    Originally called the “reduction of the higher tax concession for contributions of very high income earners” in the 2012 budget the two bills that comprise the measure, the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 and the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013 received royal assent on 28 June 2013. However the tax has effect from 1 July 2012. Read more...