Excess contributions tax assessment not excessive; no “special circumstances” - Thompson
30 May 2014
The Administrative Appeals Tribunal has found that an excess non-concessional contributions tax assessment was properly imposed, and that there were no special circumstances that would enable the Commissioner to exercise the discretion to disregard or allocate to another financial year some or all of the taxpayer’s non-concessional contributions.
The taxpayer had made personal superannuation contributions totalling $205,000 in the 2009-10 financial year. She deducted $23,905 of those contributions. Thus, the amount of her non-concessional contributions for the financial year was $181,095 ($205,000 minus $23,905). As a result, the taxpayer was taken to have exceeded her non-concessional contributions cap for the 2009-10 financial year.
The taxpayer made an application requesting the Commissioner to make a written determination under s 292-465(l)(b) of the Income Tax Assessment Act 1997 to disregard part of her non-concessional contributions for the financial year ending 30 June 2010. The Commissioner refused that application, and instead assessed the taxpayer to excess non-concessional contributions tax.
Under s 292-465(3), the Commissioner may make a written determination disregarding a taxpayer’s excess non-concessional contributions for a particular financial year or allocating some or all of the taxpayer’s non-concessional contributions to another financial year. The Commissioner must be satisfied that there are special circumstances, and that making the determination is consistent with the object of Div 292 of the ITAA 1997.
In this case, the Tribunal found there were no special circumstances.
First, the taxpayer had withdrawn money from her superannuation, paid it into a personal account, and later made contributions from that account. The Tribunal held that this was a new non-concessional contribution made by the taxpayer and could not be described as the same amount as that which originally went into superannuation.
Secondly, the taxpayer contended that she received incorrect advice in relation to a contribution and this in and of itself amounted to a special circumstance. The Tribunal held that there is nothing “special” in having received incorrect advice. In that respect, the taxpayer’s appropriate potential remedy was with the Financial Ombudsman Service.
Finally, the taxpayer’s difficult personal circumstances did not amount to a special circumstance.
Re Thompson and FCT  AATA 339 (Prof R Deutsch DP, 29 May 2014).