• The impact of this case on ATO policy is discussed in Decision Impact Statement: Came and Commissioner of Taxation [2023] AATA 3951 (2022/7426).

Came v FC of T

Members:
I Molloy DP

Tribunal:
Administrative Appeals Tribunal, Adelaide

MEDIA NEUTRAL CITATION: [2023] AATA 3951

Decision date: 28 November 2023

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I Molloy (Deputy President)

INTRODUCTION

1. This is an application for review of a decision disallowing the applicant's objection concerning his liability for income tax with respect to superannuation lump sums paid from South African superannuation funds in the year of income ending 30 June 2020 (the 2020 income year ) after the applicant had become an Australian resident.^[1] Exhibit A, ( T Documents ) T1 & T2.

2. The proceeding concerns the application of provisions of Subdivision 305-B of the Income Tax Assessment Act 1997 (Cth) (the ITAA 1997 ) (which govern the tax treatment of superannuation benefits from foreign superannuation funds) and Subdivision 960-C of the ITAA 1997 (which governs the translation of amounts in a foreign currency into Australian currency) in respect of those superannuation lump sums.

ISSUES

3. There were some differences in the way each party framed the issues,^[2] Applicant’s Statement of Issues, Facts and Contentions dated 13 February 2023 ( Applicant’s SIFC ), [5]; Respondent’s Amended Statement of Issues, Facts and Contentions dated 6 March 2023 ( Respondent’s SIFC ), [6]. but they can be stated as follows:

• (a) whether s 305-80(1) of the ITAA 1997 applied so that the applicant was entitled to choose (pursuant to s 305-80(2)) that all of his applicable fund earnings in relation to the superannuation lump sums be included, as he contends, in the assessable income of the complying superannuation fund into which the lump sums were paid, or whether so much of the lump sums as equals the applicant's applicable fund earnings must instead be included in his assessable income (for the 2020 income year);
• (b) the proper calculation of the applicant's applicable fund earnings worked out under s 305-75 of the ITAA 1997 - particularly, how each "amount" the subject of subparagraphs (a)(i) and (a)(iii) and paragraph (b) of s 305-75(3), being amounts in a foreign currency (South African rand) are to be translated into Australian currency under Subdivision 960-C of the ITAA 1997, having regard to the special translation rules in the table in s 960-50(6) (as modified by reg 960-50.01(1) of the Income Tax Assessment Regulations 1997 (Cth) (the ITAR 1997 ).

4. The applicant submits that if he was entitled to choose pursuant to s 305-80(2) of the ITAA 1997, as he purported to do, that all of his applicable fund earnings in relation to each superannuation lump sum be included in the assessable income of the complying superannuation fund, and excluded from his assessable income, that is, if he is successful on the first issue, then there is no need to address the second issue.^[3] Applicant’s Submissions dated 20 September 2023 ( Applicant’s Submissions ), [8]. The respondent submits that I should determine the second issue regardless of the outcome on the first issue.

FACTS

5. The facts are not in dispute.^[4] Applicant’s SIFC, [6]. What follows is substantially taken from the parties SIFCs. The applicant became an Australian resident for taxation purposes on 7 July 2004, having ceased his employment in South Africa and immigrated to Australia. He has since remained an Australian resident.

6. On the date the applicant became an Australian resident, he held the following vested benefits in what are each accepted as being a foreign superannuation fund for the purposes of Subdivision 305-B of the ITAA 1997, measured in South African rand:

Fund	Amount
Lifestyle Retirement Annuity Fund	R177,561
The Combined Retirement Annuity Fund	R16,579 ATC 11737
African Life Pension Fund	R92,730
Deloitte & Touche Pension Fund	R75,066
Deloitte and Touche Provident Fund	R50,101

7. On the day before the applicant became an Australian resident (being 6 July 2004), the exchange rate from South African rand to Australian dollars was 4.4007.

8. On 18 March 2014, the whole vested benefit the applicant held in the Lifestyle Retirement Annuity Fund, then in the amount of R387,446, was transferred (as a superannuation lump sum) to The Combined Retirement Annuity Fund. On that date, the exchange rate from South African rand to Australian dollars was 9.7590.

9. During the 2020 income year, the applicant received the following superannuation lump sums from his then foreign superannuation funds:

Fund	Date of payment	Gross Payment	Less Withholding Tax Deducted	Net Amount
The Combined	20/11/2019	R690,259.00	R113,658.96	R576,600.04
Retirement Annuity Fund	17/02/2020	R620,426.00	R192,964.49	R427,461.51
African Life Pension Fund	17/02/2020	R328,426.20	R118,266.51	R210,159.69
Deloitte & Touche Pension Fund	17/02/2020	R216,690.52	R78,072.66	R138,617.86

10. Upon the withdrawal by the applicant of his full entitlements in the form of superannuation lump sums, the foreign superannuation funds paid the net amount of each lump sum into the applicant's Emigrant Capital Account, in South Africa, in compliance with South African law which prohibited the applicant (being an emigrant) from transferring funds out of South Africa by any other means.

11. More specifically, the applicant was compelled by the provisions of the South African Currency Exchanges Act 1933 (Act No 9 of 1933) and related Exchange Control Regulations to deposit the proceeds from his assets held in South Africa into an Emigrant Capital Account. The account was subject to South African exchange control regulation and restrictions and overseen by the SA Financial Surveillance Department.^[5] T Documents, T3(a), [16].

12. The applicant's Emigrant Capital Account was held by him in his name and personal capacity. Upon payment by the foreign superannuation funds of the net amount of each superannuation lump sum, the applicant was free to use the amounts he received into his Emigrant Capital Account as he wished subject to the regulation and restrictions mentioned.

13. On the date when the applicant received the payment from The Combined Retirement Annuity Fund into his Emigrant Capital Account (20 November 2019), the exchange rate from South African rand to Australian dollars was 10.0412; on the date when the applicant received each of the payments from the other three foreign superannuation funds (17 February 2020), the exchange rate was 10.0654.

14. Following compliance with South African legal requirements, the amounts in the applicant's Emigrant Capital Account received from the foreign superannuation funds were transferred out of South Africa. Each of the amounts was paid into the Strayan Superannuation Fund.

15. The Strayan Superannuation Fund is an Australian superannuation fund which was at all material times a complying superannuation fund for the purposes of Subdivision 305-B of the ITAA 1997.

16. The amount the applicant received from The Combined Retirement Annuity Fund (R576,600.04) was paid into the Strayan Superannuation Fund on 19 December 2019; the other amounts the applicant received (R427,461.51 from the African Life Pension Fund, R210,159.69 from the Deloitte & Touche

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Pension Fund and R138,617.86 from the Deloitte and Touche Provident Fund) were each paid into the Strayan Superannuation Fund on 13 March 2020.

17. Copies of the applicant's Emigrant Capital Account statements (numbers 39 to 43), show the receipt of each lump sum benefit and the remittance of all of the lump sum amounts to the Strayan Retirement Fund.^[6] Ibid, T3(a), [20]. The applicant stressed in his submissions,^[7] Applicant’s Submissions, [74]. which is borne out by the evidence, and not disputed by the respondent, that he transferred each lump sum to the Strayan Superannuation Funds as directly as he could in the circumstances.

18. He did this by funding the Emigrant Capital Account to deal with any known costs, thus keeping the lump sum amounts intact and whole; making no interim use of the funds; and transferring the entirety of each lump sum promptly.

19. The applicant claims that he made elections, within s 305-80(2) of the ITAA 977, to have all of his applicable fund earnings from the foreign superannuation funds included in the assessable income of the Australian complying superannuation fund into which the superannuation lump sums were paid. He says he acted in accordance with Guidance, published by the Australian Tax Office, as follows:^[8] T Documents, T3(a) paragraph 5, ATO Guidance - Super lump sums from a foreign super fund. https://www.ato.gov.au/Individuals/Super/In-detail/Withdrawing-and-using-your-super/Super-lump-sums-from-a-foreign-super-fund/Last modified: 01 Sep 2016, QC 19303. The ATO Guidance has since been modified to refer expressly to a transfer of “your super interest directly from the foreign super fund into a complying Australian super fund”: Last modified: 02 August 2023.

You must include in your assessable income for the year the amount of the lump sum that relates to your applicable fund earnings if you:

• • received the super lump sum from a foreign super fund more than six months after gaining residency or ceasing foreign employment, and
• • were an Australian resident when you received it.

However, you may choose to pay the lump sum into a complying super fund. You can choose to have all or part of your applicable fund earnings included in the assessable income of that fund. If you do, then the amount of the super lump sum that you will include in your assessable income is the applicable fund earnings reduced by the amount of the applicable fund earnings you have chosen to be assessed in the fund.

20. Therefore, in respect of his income tax return for the 2020 income year,^[9] T Documents, T4. the applicant purported to choose pursuant to s 305-80(2) of the ITAA 1997 for all of his applicable fund earnings in respect of each of the above superannuation lump sums be included in the assessable income of the Strayan Superannuation Fund, and did not include any part of those earnings within his own assessable income.

21. The applicant's tax return was lodged on this basis as agreed with the Australian Taxation Office, in anticipation of his foreshadowed objection to any adverse assessment. Following an audit, the Commissioner issued a notice of amended assessment^[10] Dated 27 January 2022; T11. which assessed the applicable fund earnings to the applicant. No tax shortfall penalty was assessed.

22. The applicant's objection against the amended assessment was disallowed in full.^[11] T Documents, T2. Consequently, the applicant lodged the application for review.^[12] Ibid, T1.

FIRST ISSUE

23. The respondent does not dispute that the applicant chose that all of his applicable fund earnings in respect of each of the above superannuation lump sums be included in the assessable income of the Strayan Superannuation Fund. The respondent contends, however, that his choosing was ineffective and the applicable fund earnings were therefore assessable to the applicant personally.

24. The respondent submits that under the relevant legislation, contained in Subdivision 305-B of the ITAA 1997, the choice is only available where a superannuation lump sum is paid directly from a foreign superannuation fund into an Australian complying superannuation fund. The choice is not available in circumstances where, as here, the taxpayer receives the superannuation lump sum and then pays the lump sum received into a complying superannuation fund.

25. The fact that a direct transfer of the superannuation lump sums from the South African superannuation funds was not permitted under South Africa law, according to the respondent, is irrelevant and, in particular, has no bearing upon the proper construction of the legislation.

26.

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ATC 11739

The applicant contends that under the legislation, on its true construction, the choice he made was available to him and in consequence the applicable fund earnings are assessable as income in the Strayan Superannuation Fund.

Previous legislation

27. The principal statutory provisions relevant to this application are in Subdivision 305-B of the ITAA 1997 which is headed "Superannuation benefits from foreign superannuation funds". These provisions were introduced into the ITAA 1997 by the Tax Laws Amendment (Simplified Superannuation) Act 2007 (Cth) (the 2007 Act ).

28. The respondent submits that the enactment of these provisions served to maintain the existing tax treatment of superannuation lump sum benefits paid from foreign superannuation funds under previous legislation while simplifying the terminology applying to such benefits.

29. In tracing the legislation, the respondent referred to s 27CAA of the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936 ). Section 27CAA, in its original form, was repealed and replaced in 2004 by the Tax Laws Amendment (2004 Measures No 2) Act 2004 (Cth) (the 2004 Act ). Section 27CAA, in its substituted form, which the respondent submits is the genesis of the current legislation, was relevantly as follows:

27CAA Assessable income to include component of lump sum payment from an eligible non-resident non-complying superannuation fund

• (1) If:
  • (a) a payment (the relevant payment ) of a lump sum (including a payment made because a superannuation pension or annuity is commuted) is made from a fund that is an eligible non-resident non-complying superannuation fund (the paying fund ) in relation to a taxpayer; and
  • (b) the relevant payment is not an exempt resident foreign termination payment or an exempt non-resident foreign termination payment; and
  • (c) the relevant payment is not made to another eligible non-resident non-complying superannuation fund; and
  • (d) had the paying fund been a superannuation fund, the relevant payment would, apart from (ma) of the definition of eligible termination payment , have been an eligible termination payment; and
  • (e) the amount worked out under the formula in subsection (2) is a positive amount;

    then, subject to subsection (4), the taxpayer's assessable income for the year of income includes the amount worked out under that formula.

• …
• (2) If:
  • (a) the relevant payment is paid to a complying superannuation fund; and
  • (b) immediately after it is paid, the taxpayer no longer has an interest in the paying fund;

    the taxpayer may elect that the whole or a part of the amount worked out under the formula in subsection (2) (but not exceeding the amount of the relevant payment) is to be treated as a taxable contribution by the complying superannuation fund.

• (3) If the taxpayer makes an election under subsection (3), then the amount included in the taxpayer's assessable income under subsection (1) is reduced by the amount covered by the election.
• (4) An election under subsection (3):
  • (a) must be in writing; and
  • (b) must comply with any requirements specified in the regulations.
• …

30. Under this provision a taxpayer could only make the relevant election where there was payment of a lump sum from the paying fund direct to a complying superannuation fund. In this respect the respondent refers to the Explanatory Memorandum and the Second Reading Speech for the Bill which became the 2004 Act. The Explanatory Memorandum includes the following (emphasis added):

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ATC 11740

Outline of chapter

9.1 Schedule 9 to this bill amends the Income Tax Assessment Act 1936 (ITAA 1936) to alter the taxation treatment that applies when payments are made from overseas superannuation funds. …

…

Summary of new law

9.8 Schedule 9 to this bill will amend the ITAA 1936.

9.9 The key change will be to allow an individual who is having overseas superannuation paid directly to an Australian complying superannuation fund to elect to have part of the payment treated as a taxable contribution in the Australian fund. By doing so the fund, rather than the individual, will pay relevant tax on the payment and tax will be paid at the concessional superannuation fund rate rather than at the individual's marginal rate. …

…

9.14 If the overseas superannuation is not paid directly to an Australian complying superannuation fund (e.g. if the overseas superannuation is paid direct to the taxpayer) then the assessable amount will continue to be included in the taxpayer's assessable income and taxed at their marginal rate.

…

31. It is clear from these and other parts of the Explanatory Memorandum^[13] See also paragraphs 9.2, 9.7, 9.9, 9.14 (table) and 9.18 (incl. example 9.1) of the Explanatory Memorandum. that, under the new s 26CCA of the ITAA 1936, taxpayers were only given the relevant choice where their overseas superannuation payment was paid directly from a foreign superannuation fund to an Australian complying superannuation fund.

32. This is clear from the provision itself. Section 27CAA provides for an election if there is a payment (the relevant payment ) of a lump sum made from an eligible non-resident non-complying superannuation fund (the paying fund ) (subsection (1)) and that relevant payment is paid to a complying superannuation fund (subsection (3)). The provision contemplates one and the same payment, the relevant payment, being made from the paying fund to the complying superannuation fund.

ITAA 1997

33. Section 27CCA of the ITAA 1936, in its substituted form, was repealed by the 2007 Act which included relevantly Division 305 in the ITAA 1997, concerning the tax treatment of superannuation benefits received by members of non-complying plans (including foreign superannuation funds).^[14] ITAA 1997, s 305-1.

34. Superannuation benefits from foreign superannuation funds are dealt with in Subdivision 305-B (s 305-55 to s 305-80). It is agreed that the provisions most relevant to this review are ss 305-70 and 305-80.

35. Section 305-70 of the ITAA 1997 provides (and at all relevant times provided):

305-70 Lump sums received more than 6 months after Australian residency or termination of foreign employment etc.

Superannuation lump sums to which section applies

• (1) This section applies to a *superannuation lump sum you receive from a *foreign superannuation fund if:
  • (a) you are an Australian resident when you receive the lump sum; and
  • (b) sections 305-60 and 305-65 do not apply to the lump sum.^[15] It is common ground that ss 305-60 and 305-65 do not apply.

Assessable part

• (2) Include in your assessable income so much of the lump sum (excluding any amount mentioned in subsection (4)) as equals:
  • (a) your *applicable fund earnings (worked out under section 305-75); or
  • (b) if you have made a choice under section 305-80-your applicable fund earnings, less the amount covered by the choice.

    Note: Under section 305-80, if your lump sum is paid into a complying superannuation plan, you can choose to have some or all of the applicable fund earnings excluded from your assessable income. The amount you choose is included in the assessable income of the plan: see section 295-200.

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ATC 11741

Non-assessable, non-exempt part

• (3) The remainder of the lump sum is not assessable income and is not *exempt income.

Amount paid into another foreign superannuation fund

• (4) Any part of the lump sum that is paid into another *foreign superannuation fund is not assessable income and is not *exempt income.

  Note: However, your applicable fund earnings under section 305-75 in relation to a later lump sum payment out of the other foreign superannuation fund may include an amount ( previously exempt fund earnings ) attributable to the lump sum.

36. Section 305-80 of the ITAA 1997 provides:

305-80 Lump sums paid into complying superannuation plans-choice

• (1) This section applies if:
  • (a) section 305-70 applies to a *superannuation lump sum that is paid from a *foreign superannuation fund; and
  • (b) you are taken to receive the lump sum under section 307-15; and
  • (c) all of the lump sum is paid into a *complying superannuation fund; and
  • (d) immediately after the lump sum is paid into the complying superannuation fund, you no longer have a *superannuation interest in the foreign superannuation fund.
• (2) You may choose for all or part of your *applicable fund earnings worked out under section 305-75 (but not exceeding the amount of the lump sum) to be included in the assessable income of the *complying superannuation plan.

  Note: Section 295-200 provides for the amount specified in the choice to be included in the assessable income of the complying superannuation plan.

• (3) Your choice:
  • (a) must be in writing; and
  • (b) must comply with the requirements (if any) specified in the regulations.

37. The respondent contends that although the applicant made a choice in respect of each lump sum, being in each instance as to all of the applicable fund earnings, it was not a choice made under s 305-80. The reason, as the respondent contends, is that on the proper construction of s 305-80, read with s 307-15, the choice is only available to a taxpayer where the superannuation lump sum is paid directly from the foreign superannuation fund into a complying superannuation fund at the taxpayer's direction or request,^[16] Respondent’s Submissions, [40]. essentially the same requirement as specified under the previous s 27CAA of the ITAA 1936.

38. Section 307-15 of the ITAA 1997, in Division 307 ("Key concepts relating to superannuation benefits"), Subdivision 307- A ("Superannuation benefits generally"), provides:

307-15 Payments for your benefit or at your direction or request

• (1) This section applies for the purposes of:
  • (a) determining whether a payment is a superannuation benefit ; and
  • (b) determining whether a * superannuation benefit is made to you, or received by you.
• (2) A payment is treated as being made to you, or received by you, if it is made:
  • (a) for your benefit; or
  • (b) to another person or to an entity at your direction or request.

    Note: Paragraph (b) would cover, for example, a direction by you that a payment be rolled over from your original superannuation fund into another superannuation fund.

39. On an initial reading this appears to me to cover the applicant's situation. Section 305-80 applies where, relevantly, "you are taken to receive the lump sum under section 307-15". Under s 307-15(2)(a) "a payment is treated as made to you, or received by you, if it is made … for your benefit". The lump sums paid from the foreign superannuation funds and received by the applicant were all made for the applicant's benefit.

40. The respondent submits, however, that s 307-15(2)(a) has no application. Section 305-80

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ATC 11742

is said not to apply where the taxpayer actually receives the payment notwithstanding it is made for the taxpayer's benefit. The respondent submits s 305-80 applies if (and only if) a taxpayer is "taken to receive" a superannuation lump sum that is paid from a superannuation fund under s 307-15 of the ITAA 1997. Section 307-15 relevantly provides that a payment is "treated as being received" by a taxpayer if it is made "to another person or to an entity at your [the taxpayer's] direction or request" under s 307-15(2)(b).

41. The respondent places some importance on the presence of the words "taken to receive" in s 305-80(1)(b), operating with the words "treated as being" in s 307-15(2), in submitting that the receipt must be a "deemed receipt". This would be a stronger argument if the words "treated as being …etc" in s 307-15(2) prefaced only paragraph (b) of that provision, but they preface paragraphs (a) and (b). On my reading of s 307-15(2), each of the circumstances referred to in those two paragraphs, including where a payment is made "for your [the taxpayer's] benefit", is "treated as being made to [the taxpayer], or received by [the taxpayer]."

42. The respondent, however, goes further, and submits that "the direction or request" under s 307-15(2)(b), resulting in the "deemed" receipt, must be a direction or request to make the payment to a complying superannuation fund. The respondent submits that this comes from reading paragraph (c) of s 305-80(1) with paragraph (b) as that latter paragraph is construed by the respondent. So where s 305-80(1) is limited to a deemed receipt under s 307-15(2)(b) by way of payment "to another person or to an entity at [the taxpayer's] direction or request", that other person or entity must be "a complying superannuation fund".

43. I have difficulty in accepting the respondent's construction of these provisions which I regard as strained. I was referred to s 15AC of the Acts Interpretation Act 1901 (Cth) which provides that where an Act has expressed an idea in a particular form of words, and a later Act appears to have expressed the same idea in a different form of words for the purpose of using a clearer style, the ideas shall not be taken to be different merely because different forms of words were used. Section 1-3 of the ITAA 1997 is in similar terms, relating specifically to provisions which were in the ITAA 1936, and are now in rewritten form in the 1997 Act.

44. I accept the applicant's submission that, on any interpretation, the provisions in the ITAA 1997 which replaced s 27CAA of the ITAA 1936 were substantive, and not merely stylistic. Subdivision 305-B of the ITAA, in particular, s 305-80, does not use a clearer style to express the idea (if it expresses it at all) that a superannuation lump sum payment from a foreign superannuation fund must be paid directly to a complying superannuation fund in order for the taxpayer to make the relevant election. That idea was clearly expressed in s 26CAA of the ITAA 1936. The same cannot be said for the provisions in the ITAA 1997 which replaced it. If the legislature truly intended to express the same idea in Subdivision 305-B, especially if it was striving for a clearer expression, it could have simply stated that as a requirement, for example, in paragraphs (b) and (c) of s 305-80(1).

45. The respondent submits that paragraph (d) of s 305-80(1), that "immediately after the payment into the complying superannuation fund, you [the taxpayer] no longer have a superannuation interest in the foreign superannuation fund", cannot be satisfied where the taxpayer receives the superannuation lump sum (and thus no longer has a superannuation interest in the foreign superannuation fund) and subsequently pays the lump sum received into a complying superannuation fund.

46. But paragraph (d) does not impose a positive requirement that the taxpayer still have an interest in the foreign superannuation fund until the lump sum is paid into the complying superannuation fund. And as the applicant points out, even where there is a direct payment from a foreign superannuation fund to a complying superannuation fund, there is not uncommonly a time lapse, albeit a short one, during which the taxpayer has ceased to have an interest in the foreign superannuation fund and the lump sum has not yet been paid into the complying superannuation fund.

47.

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The respondent referred to the Explanatory Memorandum for the Bill which became the 2007 Act, in particular, paragraph [2.86] as follows:

The existing tax treatment of superannuation benefits paid from non-complying superannuation plans will be maintained, however the terminology applying to these benefits will be simplified. In summary:

…

Superannuation lump sum benefits paid from 'foreign superannuation funds' continue to be taxed on the earnings while the person was an Australian resident. These funds were formerly known as eligible non-resident non-complying superannuation funds [ … Subdivision 305-B].

48. I do not find this extract, including the brief reference to Subdivision 305-B, to be of any real assistance in the present case. The applicant accepts the tax treatment of superannuation benefits paid from non-complying superannuation plans, including foreign superannuation funds, was maintained. The issue is narrower than that.

49. I was also referred to s 295.200 of the ITAA 1997 - Transfers from foreign superannuation funds. Again, however, I do not gain any real assistance from this provision in respect of the particular issue before me.

50. The applicant submits that through the 2007 Act the legislature made a deliberate change to dispense with the requirement that a superannuation lump sum be paid directly from a foreign superannuation fund to a complying superannuation fund before the relevant election could be made. The applicant referred to the legislative changes introduced to substitute s 27CAA of the ITAA 1936. He submits the changes were characterised as an alteration impacting "all individuals who have or will migrate to Australia and have superannuation overseas which they wish to transfer to an Australian fund".^[17] Paragraph 9.52 of the Explanatory Memorandum for the Bill which became the Tax Laws Amendment (2004 Measures No 2) Act 2004 (Cth).

51. The applicant submits that the wording of the new s 27CAA did not fully align with that description, because the requirement for a direct payment, as mandated by that provision, only suited some people, for example, emigrants or Australians returning from the United Kingdom, who could make a direct payment from their foreign superannuation fund to a complying superannuation fund. The law discriminated against at least South African emigrants. Section 305-80 he submits addressed this inequity.

52. The applicant submits the provisions of s 305-80(1) envisage an idea that there may be a receipt followed by a payment of the whole amount into a complying superannuation fund. This contrasts with the old section 27CAA of the 1936 Act that had the effect that all payments from foreign superannuation funds must be made directly to the complying superannuation fund. The old idea only granted concessions to some. By the 2007 Act this fundamental unfairness was corrected.

53. Section 305(1) refers to receiving "the lump sum", and to "the lump sum" being paid into a complying superannuation fund. Under the previous s 26CCA the reference is to one and the same "payment" being made from the foreign superannuation fund into the complying superannuation fund. This change of terminology, in my view, tends to support the notion that there may be separate payments from the foreign superannuation fund and into the complying fund and that s 305-80(1) is satisfied provided "the lump sum" remains unchanged.

54. The applicant submits that the respondent, in considering the language and context of s 305-80(1)(b) of the ITAA 1997, in conjunction with s 307-15, approached the latter section in a fragmented manner. By isolating s 307-15(2)(b) from s 307-15(2)(a), the otherwise comprehensive scope is restricted. I accept the respondent's interpretation requires that s 305-15 be read piecemeal, treating s305-15(2)(a) as wholly distinct from and separate from s 305-15(2)(b).

55. The respondent submits, and I accept, that s 305-80(1) is to be read as a whole, and given its ordinary meaning in light of its context and purpose.^[18] Westpac Securities Administration Ltd v Australian Securities and Investments Commission (2021) 270 CLR 118 at [54] . I also accept the respondent's submission that the section within which s 305-80(1) is contained must be read as a whole.^[19] Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) (2015) 257 CLR 544 at [154] ; Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213 .

56. In my view, applying these principles, the 2007 Act evinces a legislative intention to bring about a change from the requirement,

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previously contained in s 26CAA of the ITAA 1936, that there be a direct payment from whatcame to be known as a foreign superannuation fund to a complying superannuation fund.

57. Where s 305-80(1)(b) of the ITAA 1997 states that this section applies if "you are taken to receive the lump sum under section 307-15", it is referring to all of the same circumstances in which a payment is "treated" as being made to or received by a taxpayer under the latter provision. That includes a payment made "for your (the taxpayer's) benefit" under s 307-15(2) (a), including such payments made directly to a taxpayer as occurred in this case.

58. To say, as the respondent contends, that s 307-15 cannot apply where a payment is actually received by a taxpayer, but only applies where there is a "deemed receipt", and furthermore, that "the other person or the entity" receiving the payment must be a complying superannuation fund, in my view, does not accord with the current legislation.

SECOND ISSUE

59. As the first issue is decided in favour of the applicant, as the applicant submitted, the second issue does not arise. There are no factual matters that call for findings in case this issue arises for determination at a later stage. The respondent did not advance any good reason why the second issue should still be determined. I accept the applicant's submission.

CONCLUSION

60. The objection decision should be set aside and the applicant's objection allowed.