02 Apr 15 Taxation of excess concessional contributions
The ATO has announced that it has resolved the system issues which have delayed processing excess concessional contributions (ECC) made in 2013-2014. Accordingly, the ATO has started issuing income tax assessments to individuals that include ECC.
At present only low volumes are being issued, but processing will progressively increase through April/May. Funds can expect to start receiving release authorities in April for those individuals who choose to have money released from super. The ATO is unsure how many individuals will elect to release money from super but estimates it could be up to 40,000 over the coming months.
In most cases, the ATO is no longer sending out pre-assessment letters to individuals before issuing an income tax assessment that includes ECC.
Individuals and funds need to be aware of the importance of ensuring contributions data is correctly reported to the ATO through income tax returns, member contributions statements and self-managed super fund annual returns. Incorrect data will result in erroneous assessments which will then need to be corrected.