13 Feb 1414
On Excess Concessional Contributions
MEMBER 11 writes:
"Lamentably grizzles commence early in the year, so here goes.
The first letter has arrived to announce 'The following superannuation funds have reported contributions for you in the 2012-13 financial year'. The first fund had $0 contributions from any source, but so be it that the ATO deems it have received contributions albeit $0.
My client was given the option of having the excess treated as assessable income. Good idea. However, this is the sting. The ATO pre-fills the form with the name of the fund to release the excess. In this case, the ATO used the fund with $0 contributions. All is not lost.
The form permits us to select another fund and to supply details. But we have to justify our choice from four options - none of which applies to my client. Not one option considers that we may wish the release of funds to come from the super fund into which the excess contributions were paid!
My suggestions to the ATO are
- to pre-fill with the name of a super fund that has received concessional contributions
- if the ATO really needs justification to release from another fund, please add a box that reflects that another super fund may have received the excess contributions.
And another thing...The ATO advises that the release of the excess funds will be paid to the ATO who will use the funds to offset any other tax etc etc. I assume that this will be similar to Family Tax Assistance. A client receives a reasonable FTA credit adjustment in August 2012 but the ATO grabs the credit to offset a tax debt not due until March 2013. The ATO will not pay Credit Interest on Early Payment as the ATO grabbed the money, the client did not pay. So goodbye money and the ATO has an interest free loan."