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The AAT has exercised the discretion conferred by s 292-465(1)(b) of ITAA 1997 and held that, because of special circumstances, a non-concessional contribution made by the taxpayer in the income year ended 30 June 2009  be disregarded in determining whether she had made excess non-concessional contributions in the income year ended 30 June 2011.

Prior to 2008, the taxpayer and her husband had separate superannuation accounts; the taxpayer had an account with Unisuper, and her husband had an account with Sunsuper.

In 2008-9, in anticipation of her husband reaching the eligibility for the age pension, he transferred his superannuation into a new account that was in the taxpayer’s name with Sunsuper (“Transaction 1”). This occurred following advice sought from both a Centrelink Finance Officer and a representative of Sunsuper.

In 2010-11, the taxpayer then made another transaction with her Unisuper superannuation account, this time withdrawing $240,000 and re-contributing $200,000 of it to the same account, on the understanding that this would be beneficial to her children after she died (“Transaction 2”).

The Commissioner assessed the taxpayer as having made an excess non-concessional contribution in 2010-11 of $43,858 for that year. This was the excess of the "bring forward" cap of $450,000 triggered in the 2009 income year.

The AAT held that special circumstances existed in relation to Transaction 1 which justified the exercise of the discretion to disregard the non-concessional contribution, and that this was consistent with the object of the legislation.  In contrast, the AAT found no special circumstances in relation to Transaction 2. However, the finding in relation to Transaction 1 was sufficient to have the Commissioner's objection decision in relation to the excess contributions assessment set aside. In addition, the Commissioner's penalty assessment was set aside.

Dowling and FCT [2013] AATA 49 (AAT, Dr Levy RFD SM, 1 February 2013).


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