17 Sep 1010 Excess Super Contributions Tax
We took the opportunity this week to again highlight the inequity of the laws relating to excess superannuation contributions tax. After the ATO released a fact sheet concerning situations where they may or may not allow contributions to be disregarded or reallocated, the Taxation Institute wrote a letter to the editor of The Australian Financial Review on Wednesday 15 September.
The ATO's lack of sympathy for so called ‘excess super sinners' highlights the need for the government to amend the laws relating to excess contributions tax. We have expressed the strong view that the government must act to stop people being hit with tax penalties of up to 93% that apply to superannuation contributions in excess of government limits.
People who are caught include those who have two or more unrelated employers meeting their respective superannuation guarantee responsibilities in respect of the person. The law should provide a mechanism for the ATO to exercise a generous power of discretion where the breach of the cap was unintended. We outlined some possible solutions in the letter and we welcome the opportunity to discuss the matter with the new Superannuation Minister, the Hon Bill Shorten MP.