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The world of superannuation contributions


The rules which govern superannuation contributions and, in particular, the excess contributions tax and the imposition of caps on contributions are extremely complex and subject to frequent change. The Australian Taxation Office has discretion to disregard or allocate to another financial year all or part of a superannuation contribution in very limited circumstances. For these reasons, it is essential that people who give advice on contributions have a thorough understanding of the rules.

This article examines a number of common mistakes with regard to both concessional contributions and non-concessional contributions that create adverse tax consequences. Examples are provided.

The article also refers to a recent ATO interpretative decision which appears to make it possible to avoid excess contributions tax, yet also gain a deduction, in particular circumstances, and to the practice of in specie transfers. In the author’s view, the current draconian approach under the cap regime needs to be revisited and changes made.

Author profile

Mike Mitchell
Mike has been a senior consultant in the technical team at MLC Advice Solutions for over nine years. His role is to assist financial planners in the areas of superannuation, taxation, estate planning, social security and investments. He has over 34 years experience in the financial planning and funds management industries. Over this period he has headed up several technical teams and also developed several superannuation products, including the first allocated pension. - Current at 19 June 2012
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