Non-deductible concessional contribution gave rise to excess contributions tax - Sutton
18 Sep 2013
The AAT has affirmed the Commissioner’s decision to impose excess non-concessional contributions tax in respect of that part of a concessional contribution made by the taxpayer that was not deductible because it exceeded the limit imposed by s 26-55 ITAA 1997.
In the year ending 30 June 2009, the taxpayer made a personal non-concessional contribution to her superannuation fund of $450,000, utilising the bring forward provision under s292-85(3) of ITAA 1997.
On 1 July 2010, the taxpayer lodged a Notice of Intent to claim a tax deduction of $50,000 in respect of contributions made in the year ending 30 June 2011.
On the same day the Trustee of the fund acknowledged the Notice, stating “The Trustee has taken action to deduct the appropriate level of tax from the contributions claimed”.
As the taxpayer was over 50 years old on 30 June 2011, under the Income Tax (Transitional Provisions) Act 2007 (the Transitional Act), her concessional contributions cap for that year was $50,000.
The taxpayer's adjusted taxable income for 2010-2011, before any deduction for the superannuation contribution of $50,000, was $13,468.
The AAT held that on this basis, s 26-55 limited the deduction available to $13,468, and the balance of $36,532 became a non-concessional contribution by virtue of the operation of s 292-90(4)(b) ITAA 1997. As the taxpayer had made a non-concessional contribution of $450,000 to the fund in the year ending 30 June 2009, under s 292-85, the applicable non-concessional contribution cap for the year ending 30 June 2011 was nil.
It followed that the amount of $36,532 was to be treated as an excess non-concessional contribution in that year, in respect of which, under s 292-80, excess non-concessional contributions tax was payable.
Sutton and FCT  AATA 661 (AAT, Webb M, 16 September 2013).