08 Apr 11 On excess superannuation contributions tax
MEMBER 56 writes:
"When is someone going to fight 'town hall' over this incredibly bad law. I have a client who inadvertently exceeded his non-concessional contributions by $900 over two consecutive years due to a life insurance policy premium that was established via a super master trust 20 years ago. Simple term life policy - no end benefit, never claimed, always regarded as an insurance policy. Because he had contributed $150,000 and $450,000 in the two years he was faced with the prospect of a tax bill for upwards of $75,000 on excess contributions that really only totalled $1,800 over the two years - all from after tax moneys.
Don't tell me that he is alone in this - I am sure there are plenty of surprised punters out there receiving these letters from the ATO and having their life savings decimated due to very minor infringements.
Where is the logic and justice in this? Why does the ATO refuse to consider exercising its powers of discretion? Is the government so desperate for funds?
Is this something we should be pushing our respective professional bodies to fight on our behalf - a united front?