Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Act 2013 (118 of 2013)
Schedule 1 Fairer taxation of excess concessional contributions
Part 1 Main amendments
Income Tax Assessment Act 1997
1 After Division 290
Insert:
Division 291 - Excess concessional contributions
Table of Subdivisions
Guide to Division 291
291-A Object of this Division
291-B Excess concessional contributions
291-C Modifications for defined benefit interests
291-D Other provisions
Guide to Division 291
291-1 What this Division is about
There is a cap on the amount of superannuation contributions that may receive concessional tax treatment for an individual in a financial year.
Superannuation contributions that exceed your concessional contributions cap are included in your assessable income for the corresponding income year.
A tax offset compensates for the tax that generally applies to the contributions in the superannuation fund.
Note: Part 2-35 in Schedule 1 to the Taxation Administration Act 1953 contains rules about a charge you may be liable to pay, and about releasing the excess concessional contributions from superannuation.
Subdivision 291-A - Object of this Division
Table of sections
291-5 Object of this Division
291-5 Object of this Division
The object of this Division is to ensure, in relation to concessional contributions to superannuation, that the amount of concessionally taxed *superannuation benefits that an individual receives results from contributions that have been made gradually over the course of the individual's life.
Note: Division 292 has the same object, in relation to non-concessional contributions.
Subdivision 291-B - Excess concessional contributions
Guide to Subdivision 291-B
291-10 What this Subdivision is about
This Subdivision includes excess concessional contributions in your assessable income and provides a tax offset.
Table of sections
Operative provisions
291-15 Excess concessional contributions - assessable income, 15% tax offset
291-20 Your excess concessional contributions for a financial year
291-25 Your concessional contributions for a financial year
Operative provisions
291-15 Excess concessional contributions - assessable income, 15% tax offset
If you have *excess concessional contributions for a *financial year:
(a) an amount equal to the excess concessional contributions is included in your assessable income for your corresponding income year; and
(b) you are entitled to a *tax offset for that income year equal to 15% of the excess concessional contributions.
Note 1: This offset cannot be refunded, transferred or carried forward: see item 20 of the table in subsection 63-10(1).
Note 2: You may be liable to pay excess concessional contributions charge: see Division 95 in Schedule 1 to the Taxation Administration Act 1953.
Note 3: You can elect to release excess concessional contributions from superannuation: see Division 96 in that Schedule.
291-20 Your excess concessional contributions for a financial year
(1) You have excess concessional contributions for a *financial year if the amount of your *concessional contributions for the year exceeds your *concessional contributions cap for the year. The amount of the excess concessional contributions is the amount of the excess.
(2) Your concessional contributions cap is:
(a) for the 2013-2014 financial year - $25,000; or
(b) for the 2014-2015 financial year or a later financial year - the amount worked out by indexing annually the amount mentioned in paragraph (a).
Note: Subdivision 960-M shows how to index amounts. However, annual indexation does not necessarily increase the amount of the cap: see section 960-285.
291-25 Your concessional contributions for a financial year
(1) The amount of your concessional contributions for a *financial year is the sum of:
(a) each contribution covered under subsection (2); and
(b) each amount covered under subsection (3).
Note: For rules about defined benefit interests, see Subdivision 291-C.
(2) A contribution is covered under this subsection if:
(a) it is made in the *financial year to a *complying superannuation plan in respect of you; and
(b) it is included in the assessable income of the *superannuation provider in relation to the plan, or, by way of a *roll-over superannuation benefit, in the assessable income of a *complying superannuation fund or *RSA provider in the circumstances mentioned in subsection 290-170(5) (about successor funds); and
(c) it is not any of the following:
(i) an amount mentioned in subsection 295-200(2);
(ii) an amount mentioned in item 2 of the table in subsection 295-190(1);
(iii) a contribution made to a *constitutionally protected fund.
(3) An amount in a *complying superannuation plan is covered under this subsection if it is allocated by the *superannuation provider in relation to the plan for you for the year in accordance with conditions specified in the regulations.
(4) Disregard Subdivision 295-D for the purposes of paragraph (2)(b).
Subdivision 291-C - Modifications for defined benefit interests
Guide to Subdivision 291-C
291-155 What this Subdivision is about
This Subdivision modifies the meaning of concessional contributions relating to defined benefits interests.
Table of sections
Operative provisions
291-160 Application
291-165 Concessional contributions - special rules for defined benefit interests
291-170 Notional taxed contributions
291-175 Defined benefit interest
Operative provisions
291-160 Application
(1) This Subdivision applies if, in a *financial year, you have:
(a) a *superannuation interest that is or includes a *defined benefit interest; or
(b) more than one superannuation interest that is or includes a defined benefit interest.
(2) However, this Subdivision does not apply in relation to a *superannuation interest in a *constitutionally protected fund.
291-165 Concessional contributions - special rules for defined benefit interests
Despite section 291-25, the amount of your concessional contributions for the *financial year is the sum of:
(a) the contributions covered by subsection 291-25(2), and the amounts covered by subsection 291-25(3), to the extent to which they do not relate to the *defined benefit interest or interests; and
(b) your *notional taxed contributions for the financial year in respect of the defined benefit interest or interests.
291-170 Notional taxed contributions
(1) Your notional taxed contributions for a *financial year in respect of a *defined benefit interest has the meaning given by the regulations.
Note: For transitional provisions about notional taxed contributions that were previously in former subsections 292-170(6) to (9), see Subdivision 291-C of the Income Tax (Transitional Provisions) Act 1997.
(2) Regulations made for the purposes of subsection (1) may provide for a method of determining the amount of the notional taxed contributions .
(3) Regulations made for the purposes of subsection (1) may define the *notional taxed contributions, and the amount of notional taxed contributions, in different ways depending on any of the following matters:
(a) the individual who has the *superannuation interest that is or includes the *defined benefit interest;
(b) the *superannuation plan in which the superannuation interest exists;
(c) the *superannuation provider in relation to the superannuation plan;
(d) any other matter.
(4) Regulations made for the purposes of subsection (1) may specify circumstances in which the amount of *notional taxed contributions for a *financial year is nil.
(5) Subsections (2), (3) and (4) do not limit the regulations that may be made for the purposes of this section.
291-175 Defined benefit interest
(1) An individual's *superannuation interest is a defined benefit interest to the extent that it defines the individual's entitlement to *superannuation benefits payable from the interest by reference to one or more of the following matters:
(a) the individual's salary, or allowance in the nature of salary, at a particular date or averaged over a period;
(b) another individual's salary, or allowance in the nature of salary, at a particular date or averaged over a period;
(c) a specified amount;
(d) specified conversion factors.
(2) However, an individual's *superannuation interest is not a defined benefit interest if it defines that entitlement solely by reference to one or more of the following:
(a) *disability superannuation benefits;
(b) *superannuation death benefits;
(c) payments of amounts mentioned in paragraph 307-10(a) (temporary disability payments).
Subdivision 291-D - Other provisions
Guide to Subdivision 291-D
291-460 What this Subdivision is about
The Commissioner has a discretion to disregard concessional contributions or allocate them to a different financial year.
Table of sections
Operative provisions
291-465 Commissioner's discretion to disregard contributions etc. in relation to a financial year
Operative provisions
291-465 Commissioner's discretion to disregard contributions etc. in relation to a financial year
(1) The Commissioner may make a written determination that, for the purposes of working out the amount of your *excess concessional contributions for a *financial year, all or part of your *concessional contributions for a financial year is to be:
(a) disregarded; or
(b) allocated instead for the purposes of another financial year specified in the determination.
Conditions for making of determination
(2) The Commissioner may make the determination only if:
(a) you apply for the determination in accordance with this section; and
(b) the Commissioner considers that:
(i) there are special circumstances; and
(ii) making the determination is consistent with the object of this Division and Division 292.
Matters to which regard may be had
(3) In making the determination the Commissioner may have regard to the following:
(a) whether a contribution made in the relevant *financial year would more appropriately be allocated towards another financial year instead;
(b) whether it was reasonably foreseeable, when a relevant contribution was made, that you would have *excess concessional contributions or *excess non-concessional contributions for the relevant financial year, and in particular:
(i) if the relevant contribution is made in respect of you by another individual - the terms of any agreement or arrangement between you and that individual as to the amount and timing of the contribution; and
(ii) the extent to which you had control over the making of the contribution;
(c) any other relevant matters.
Requirements for application
(4) The application:
(a) must be in the *approved form; and
(b) can only be made after all of the contributions sought to be disregarded or reallocated have been made; and
(c) if you receive an *excess concessional contributions determination for the *financial year - must be given to the Commissioner within:
(i) 60 days after receiving the determination; or
(ii) a further period allowed by the Commissioner.
Notification
(5) The Commissioner must give you:
(a) a copy of the determination; or
(b) if the Commissioner decides not to make a determination - notice of that decision.
(6) The determination or notice may be included in any other notice under this Act.
Review
(7) If you are dissatisfied with:
(a) a determination made under this section in relation to you; or
(b) a decision the Commissioner makes not to make such a determination;
you may object against the determination, or the decision, as the case requires, in the manner set out in Part IVC of the Taxation Administration Act 1953.
(8) To avoid doubt:
(a) subject to subsection 14ZVB(3) of the Taxation Administration Act 1953, you may also object, on the ground that you are dissatisfied with such a determination or decision, relating to all or part of your *concessional contributions for a *financial year:
(i) under section 175A of the Income Tax Assessment Act 1936 against an assessment made in relation to you for the corresponding income year; or
(ii) under section 97-10 in Schedule 1 to the Taxation Administration Act 1953 against an *excess concessional contributions determination made in relation to you for the financial year; and
(b) for the purposes of paragraph (e) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977, the making of a determination under this section is a decision forming part of the process of making an assessment of tax, and making a calculation of charge, under this Act.