Tax and Superannuation Laws Amendment (2014 Measures No. 7) Act 2015 (21 of 2015)

Schedule 1   Excess non-concessional superannuation contributions tax reforms

Income Tax Assessment Act 1997

7   After Subdivision 292-A

Insert:

Subdivision 292-B - Assessable income and tax offset

292-15 What this Subdivision is about

An amount is included in your assessable income, and you are entitled to a tax offset, if your non-concessional contributions exceed an indexed cap and:

(a) as a result, you release an amount from your superannuation interests; or

(b) the value of your superannuation interests is nil.

This amount included in your assessable income corresponds to your associated earnings on those excess contributions.

Table of sections

292-20 Amount in assessable income, and tax offset, relating to your non-concessional contributions

292-25 Amount included in assessable income

292-30 Amount of the tax offset

292-20 Amount in assessable income, and tax offset, relating to your non-concessional contributions

Your assessable income for an income year includes an amount, and you are entitled to a *tax offset for the income year, if:

(a) you receive one or more *excess non-concessional contributions determinations for a *financial year that corresponds to the income year; and

(b) you make one or more elections under paragraph 96-7(1)(a) or (b) in Schedule 1 to the Taxation Administration Act 1953 in relation to those determinations.

292-25 Amount included in assessable income

(1) The amount included in your assessable income for the income year is equal to the amount of associated earnings stated in the most recent of those determinations.

(2) However, if:

(a) the sum of any amounts paid to you in response to release authorities issued in relation to those determinations (the total amount ) is less than the amount of the excess stated in the most recent of those determinations; and

(b) section 292-467 does not apply to you for the *financial year;

the amount included in your assessable income for the income year is equal to the amount of associated earnings that would have been stated in that most recent determination if the total amount had been the amount of the excess stated in that determination.

Note 1: The amount included in your assessable income may be nil.

Note 2: Any amounts paid to you in response to those release authorities are non-assessable non-exempt income (see section 303-17).

292-30 Amount of the tax offset

The *tax offset is equal to 15% of the amount included in your assessable income for the income year under section 292-25.

Note 1: This tax offset compensates for any tax liability of the superannuation provider on earnings from investments made with the contributions making up the excess amount stated in the most recent determination.

Note 2: This offset cannot be refunded, transferred or carried forward (see item 20 of the table in subsection 63-10(1)).