Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013 (82 of 2013)

Schedule 3   Sustaining the superannuation contribution concession

Part 1   Main amendments

Taxation Administration Act 1953

2   At the end of Chapter 3 in Schedule 1

Add:

Part 3-20 - Sustaining the superannuation contribution concession

Division 133 - Deferred payment

Table of Subdivisions

Guide to Division 133

133-A Deferral determination

133-B Debt account

133-C Compulsory payment

Guide to Division 133

133-1 What this Division is about

Payment of Division 293 tax is deferred to the extent to which the tax is attributable to defined benefit interests from which no superannuation benefit has yet become payable.

This reflects the fact that money generally cannot be released from defined benefit interests until a superannuation benefit is paid, usually upon retirement.

Subdivision 133-A - Deferral determination

Guide to Subdivision 133-A

133-5 What this Subdivision is about

The Commissioner determines the amount of your tax that is deferred to a debt account by working out the extent to which your assessed tax is attributable to defined benefit interests.

Table of sections

Operative provisions

133-10 Determination of tax that is deferred to a debt account

133-15 Defined benefit tax

133-20 How to attribute the defined benefit tax to defined benefit interests

133-25 Determination reducing tax deferred to a debt account

133-30 General provisions applying to determinations under this Subdivision

Operative provisions

133-10 Determination of tax that is deferred to a debt account

(1) The Commissioner must make a determination specifying the amount the Commissioner has ascertained as being the extent to which your *assessed Division 293 tax for an income year is *defined benefit tax attributable to a *superannuation interest.

Note 1: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

Note 2: For general provisions, including review, see section 133-30.

(2) The amount of *assessed Division 293 tax specified in the determination is deferred to a debt account for the *superannuation interest.

(3) However, the Commissioner must not make a determination under this section in relation to a *superannuation interest if, at the time the determination is to be made:

(a) the *end benefit for the superannuation interest has become payable; or

(b) a notice under section 133-125 has been made in relation to the superannuation interest.

Note: For the meaning of end benefit , see section 133-130.

(4) Subsection (1) does not apply if the Commissioner ascertains that no part of your *assessed Division 293 tax for an income year is *defined benefit tax attributable to a *superannuation interest.

133-15 Defined benefit tax

(1) Your defined benefit tax for an income year is the amount worked out using the formula:

*Divison 293 tax for the income year x (Defined benefit contribution component / *Taxable contributions for the income year)

where:

defined benefit contribution component means the amount worked out as follows:

(a) work out the lesser of the following for the corresponding *financial year:

(i) your *low tax contributions;

(ii) the total amount of your *defined benefit contributions in respect of all *defined benefit interests you have in the financial year;

(b) subtract from the result of paragraph (a) the difference (if any) between:

(i) your *taxable contributions for the income year; and

(ii) your low tax contributions for the corresponding financial year.

Note: A difference may exist for paragraph (b) because of the $300,000 high income threshold: see subsection 293-20(1) of the Income Tax Assessment Act 1997.

Exception - defined benefit contribution component is nil or less

(2) However, if the defined benefit contribution component mentioned in subsection (1) is nil, or a negative amount, no part of the *Division 293 tax for the income year is defined benefit tax .

133-20 How to attribute the defined benefit tax to defined benefit interests

(1) If you have one *defined benefit interest in a *financial year, your *defined benefit tax for the corresponding income year is attributable to that interest.

(2) If you have more than one *defined benefit interest in a *financial year, your *defined benefit tax for the corresponding income year is attributable to each such interest in proportion to the *defined benefit contributions for the interest for the financial year.

133-25 Determination reducing tax deferred to a debt account

(1) If an amount of *assessed Division 293 tax that is *deferred to a debt account for a *superannuation interest is reduced as a result of an amended assessment, the Commissioner must make a determination under this section in respect of the reduced amount.

(2) The amount so determined is a deferral reversal for the *superannuation interest.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

133-30 General provisions applying to determinations under this Subdivision

(1) The Commissioner must:

(a) make a determination as soon as practicable after:

(i) for a determination under section 133-10 - assessing the amount (whether by way of a first assessment or an amended assessment); or

(ii) for a determination under section 133-25 - amending the assessment; and

(b) give you notice in writing of the determination as soon as practicable after making it.

(2) The Commissioner:

(a) may include 2 or more determinations under this Subdivision in the same notice; and

(b) may include a notice under this Subdivision in a notice of an assessment under this Act.

(3) The validity of the determination is not affected because any of the provisions of this Act have not been complied with.

Review

(4) If you are dissatisfied with a determination made under this Subdivision in relation to you, you may object against the determination in the manner set out in Part IVC.

(5) If you are dissatisfied with a decision the Commissioner makes not to make a determination under this Subdivision:

(a) you may object against the decision in the manner set out in Part IVC; and

(b) for the purpose of working out the period within which the objection must be lodged, notice of the decision is taken to have been served on you on the day notice is given to you of:

(i) for a determination under section 133-10 - the assessment of the amount; or

(ii) for a determination under section 133-25 - the amended assessment.

Note: For the period within which objections must be lodged, see section 14ZW.

Subdivision 133-B - Debt account

Guide to Subdivision 133-B

133-55 What this Subdivision is about

The Commissioner keeps debt accounts for tax that is deferred to a debt account for a superannuation interest.

You can make voluntary payments of the debt account.

Table of sections

Operative provisions

133-60 Debt account to be kept for deferred tax

133-65 Interest on debt account balance

133-70 Voluntary payments

133-75 Commissioner must notify superannuation provider of debt account

Operative provisions

133-60 Debt account to be kept for deferred tax

Accounts to be kept

(1) The Commissioner is to keep a debt account for *Division 293 tax for you for a *superannuation interest, if an amount of your *assessed Division 293 tax is *deferred to a debt account for the superannuation interest.

Account to be debited for Division 293 tax

(2) The Commissioner must debit the debt account for the amount of *assessed Division 293 tax that is *deferred to a debt account for the *superannuation interest.

133-65 Interest on debt account balance

Interest to be debited at end of financial year

(1) If a debt account for a *superannuation interest is in debit at the end of a *financial year, the Commissioner is to debit the account for interest on the amount by which the account is in debit, calculated at the *long term bond rate for that financial year.

Note: Interest would not be debited to a debt account that is no longer being kept by the Commissioner because the assessed Division 293 tax liability being tracked in the account has been finally discharged as mentioned in subsection 133-105(3).

Remission of interest - deferral reversal

(2) The Commissioner may remit the whole or any part of an amount of interest debited, or to be debited, from a debt account under subsection (1) if:

(a) the debt account is credited:

(i) under section 133-70 because of a *deferral reversal; or

(ii) because a determination under section 133-10 is varied or revoked; and

(b) the Commissioner is satisfied that, because of that credit, it would be fair and reasonable to do so.

Remission of interest - special circumstances

(3) The Commissioner may remit the whole or any part of an amount of interest debited, or to be debited, to a debt account under subsection (1) if the Commissioner is satisfied that, because special circumstances exist, it would be fair and reasonable to do so.

133-70 Voluntary payments

(1) You may make payments to the Commissioner for the purpose of reducing the amount by which a debt account for a *superannuation interest is in debit.

(2) The Commissioner is to:

(a) acknowledge receipt of the payment to you; and

(b) credit the payment to the debt account; and

(c) notify you of the revised balance of the debt account.

The credit mentioned in paragraph (b) is to be made when the payment is received.

(3) The amount of a *deferral reversal for the *superannuation interest is to be treated as if it were a voluntary payment under this section in relation to the debt account for that interest. However, paragraphs (2)(a) and (c) do not apply in relation to that amount.

133-75 Commissioner must notify superannuation provider of debt account

If the Commissioner starts to keep a debt account for *Division 293 tax for you for a *superannuation interest, the Commissioner must give the *superannuation provider in relation to the superannuation interest a notice saying so.

Subdivision 133-C - Compulsory payment

Guide to Subdivision 133-C

133-100 What this Subdivision is about

The deferred tax liability must be paid when a superannuation benefit becomes payable from the superannuation interest.

In some cases, the amount that must be paid is capped.

Table of sections

Debt account discharge liability

133-105 Liability to pay debt account discharge liability

133-110 When debt account discharge liability must be paid

133-115 General interest charge

133-120 Meaning of debt account discharge liability

133-125 Notice of debt account discharge liability

End benefit

133-130 Meaning of end benefit

133-135 End benefit notice - individual

133-140 End benefit notice - superannuation provider

133-145 End benefit notice - material changes or omissions

Debt account discharge liability

133-105 Liability to pay debt account discharge liability

(1) You are liable to pay the amount of your *debt account discharge liability for a *superannuation interest if the *end benefit for the interest becomes payable.

(2) The liability arises:

(a) unless paragraph (b) applies - at the time the *end benefit becomes payable; or

(b) if the end benefit is a *superannuation death benefit - just before you die.

Note 1: For paragraph (a), a release authority allows money to be released from the superannuation plan to pay this amount: see subsection 135-10(1).

Note 2: For paragraph (b), the debt will be recovered from your estate: see Subdivision 260-E.

(3) Payment of your *debt account discharge liability for a *superannuation interest discharges your liability for so much of your total *assessed Division 293 tax for all income years as is *deferred to a debt account for the superannuation interest.

133-110 When debt account discharge liability must be paid

The amount of your *debt account discharge liability for a *superannuation interest is due and payable at the end of 21 days after the day on which the *end benefit for the superannuation interest is paid.

133-115 General interest charge

If your *debt account discharge liability remains unpaid after the time by which it is due and payable, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that:

(a) begins on the day on which the debt account discharge liability was due to be paid; and

(b) ends on the last day on which, at the end of the day, any of the following remains unpaid:

(i) the debt account discharge liability;

(ii) general interest charge on any of the debt account discharge liability.

Note: The general interest charge is worked out under Part IIA.

133-120 Meaning of debt account discharge liability

(1) The debt account discharge liability for a *superannuation interest for which the Commissioner keeps a debt account is the lesser of:

(a) the amount by which the debt account is in debit at the earlier of:

(i) the time the *end benefit for the superannuation interest becomes payable; and

(ii) the time a notice under section 133-125 is made; and

(b) the end benefit cap specified in a notice given to the Commissioner by the *superannuation provider under subsection (2) or section 133-140 (as the case requires).

(2) If requested by the Commissioner, the *superannuation provider in relation to a *superannuation interest must give the Commissioner notice of the amount (the end benefit cap ) that is 15% of the employer-financed component of any part of the *value of the superannuation interest that accrued after 1 July 2012.

Note: A person may make a complaint to the Superannuation Complaints Tribunal under section 15CA of the Superannuation (Resolution of Complaints) Act 1993 if the person is dissatisfied with notice given to the Commissioner under this subsection.

(3) For the purposes of subsection (2), the *value of the *superannuation interest is to be worked out at the end of the *financial year before the financial year in which the *end benefit becomes payable.

(4) A notice under subsection (2) must be given:

(a) in the *approved form; and

(b) within 14 days of the Commissioner making the request.

133-125 Notice of debt account discharge liability

(1) The Commissioner must give you a notice under this section if:

(a) the *end benefit becomes payable from a *superannuation interest for which the Commissioner keeps a debt account; or

(b) the Commissioner receives a notice from you under section 133-135 in relation to such a superannuation interest.

(2) The notice must state that you are liable to pay your *debt account discharge liability for the *superannuation interest and specify:

(a) the amount of that debt; and

(b) the day on which that debt is due and payable; and

(c) whether the amount of that debt is:

(i) the amount by which the debt account is in debit as mentioned in paragraph 133-120(1)(a); or

(ii) the end benefit cap mentioned in paragraph 133-120(1)(b).

(3) If you are dissatisfied with a notice given under this section in relation to you, you may object against it in the manner set out in Part IVC of this Act.

(4) However, you cannot object against a notice stating that the amount you are liable to pay is the amount by which the debt account is in debit, unless you are seeking to be liable to pay the end benefit cap specified in a notice given to the Commissioner by the *superannuation provider under subsection (2) or section 133-140 (as the case requires).

End benefit

133-130 Meaning of end benefit

(1) A *superannuation benefit is the end benefit for a *superannuation interest if it is the first superannuation benefit to become payable from the interest, disregarding a benefit that is any of the following:

(a) a *roll-over superannuation benefit paid to a *complying superannuation plan that is a *successor fund;

(b) a benefit that becomes payable under the condition of release specified in item 105 of the table in Schedule 1 to the Superannuation Industry (Supervision) Regulations 1994 (about severe financial hardship);

(c) a benefit that becomes payable under the condition of release specified in item 107 of that table (about compassionate ground);

(d) a benefit specified in an instrument under subsection (2).

(2) The Minister may, by legislative instrument, specify a *superannuation benefit for the purposes of paragraph (1)(d).

(3) Despite subsection 12(2) of the Legislative Instruments Act 2003, a legislative instrument made under subsection (2) may be expressed to take effect from any time on or after 1 July 2012.

133-135 End benefit notice - individual

(1) If an individual requests a *superannuation provider to pay the *end benefit from a *superannuation interest for which the Commissioner keeps a debt account, the individual must notify the Commissioner of the request.

(2) The notice must be given within 21 days after making the request.

(3) A notice under this section must be given in the *approved form.

133-140 End benefit notice - superannuation provider

(1) If the *end benefit becomes payable from a *superannuation interest for which the Commissioner keeps a debt account, the *superannuation provider in relation to the interest must give the Commissioner a notice stating:

(a) the amount of the end benefit cap mentioned in subsection 133-120(2) for the superannuation interest (unless the provider has already given the Commissioner notice of the end benefit cap under that subsection); and

(b) the expected date of payment of the benefit.

Note: A person may make a complaint to the Superannuation Complaints Tribunal under section 15CA of the Superannuation (Resolution of Complaints) Act 1993 if the person is dissatisfied with notice given to the Commissioner under this section.

(2) The notice must be given within 14 days after the earlier of:

(a) the *superannuation provider receiving a request (if any) to pay the *superannuation benefit; and

(b) the superannuation benefit becoming payable.

(3) However, this section does not apply if the *superannuation provider has not been given a notice under section 133-75 saying that the Commissioner has started to keep a debt account for the *superannuation interest.

(4) A notice under this section must be given in the *approved form.

133-145 End benefit notice - material changes or omissions

(1) If an entity that gives the Commissioner a notice under section 133-135 or 133-140 becomes aware of a material change or material omission in any information given to the Commissioner in the notice, the entity must:

(a) tell the Commissioner of the change in the *approved form; or

(b) give the omitted information to the Commissioner in the approved form.

(2) Information required by this section must be given no later than 7 days after the entity becomes aware of the change or omission.

Division 135 - Releasing money from superannuation

Table of Subdivisions

Guide to Division 135

135-A When the Commissioner must issue a release authority

135-B When a release authority can be given to a superannuation provider

135-C Release of superannuation money under a release authority

Guide to Division 135

135-1 What this Division is about

This Division contains rules about release authorities, which allow money to be released from a superannuation plan to pay amounts relating to the Division 293 tax.

Subdivision 135-A - When the Commissioner must issue a release authority

Guide to Subdivision 135-A

135-5 What this Subdivision is about

The Commissioner must issue you with a release authority to allow money to be released from a superannuation plan to pay assessed Division 293 tax that is due and payable, make voluntary payments in reduction of a debt account, or pay your debt account discharge liability.

Table of sections

Operative provisions

135-10 Release authorities

Operative provisions

135-10 Release authorities

(1) If the condition mentioned in column 1 of an item in the following table is satisfied:

(a) the Commissioner must issue you with a release authority under that item; and

(b) you have a release entitlement :

(i) equal to the amount mentioned in column 2 of that item; and

(ii) arising at the time mentioned in column 3 of that item.

Note: A release authority issued under item 3 of the table can only be given to the superannuation provider that holds the superannuation interest to which the debt account relates: see subsection 135-40(3).

Requirements for release authority

(2) A release authority must:

(a) state the amount of the *release entitlement in respect of which it is given; and

(b) be dated; and

(c) contain any other information that the Commissioner considers relevant.

Commissioner may issue a further release authority

(3) The Commissioner may at any time issue you with a further release authority in respect of a *release entitlement if:

(a) the Commissioner is satisfied that it is reasonable in the circumstances to do so; and

(b) the Commissioner has issued you with an earlier release authority in respect of that release entitlement.

Despite paragraph (2)(a), the further release authority must state the amount the Commissioner considers reasonable in the circumstances, but not exceeding the amount of the release entitlement.

Note: For variation and revocation of release authorities, see subsection 33(3) of the Acts Interpretation Act 1901.

Release authority not to be issued to trustee of deceased estate

(4) To avoid doubt, this section does not require or permit the Commissioner to issue a release authority to the trustee of a deceased estate.

Subdivision 135-B - When a release authority can be given to a superannuation provider

Guide to Subdivision 135-B

135-35 What this Subdivision is about

You may give a release authority to a superannuation provider within 120 days of being issued with it.

The Commissioner may give the release authority to a superannuation provider if you fail to pay assessed Division 293 tax that is due and payable within 120 days after the release authority being issued.

Table of sections

Operative provisions

135-40 When you may give release authority to superannuation provider

135-45 When Commissioner may give release authority to superannuation provider

Operative provisions

135-40 When you may give release authority to superannuation provider

(1) You may give the release authority to a *superannuation provider that holds a *superannuation interest for you within 120 days after the date of the release authority.

(2) You may request the *superannuation provider, in writing, to pay a specified amount in relation to the release authority.

Note 1: For the amount that the provider pays under a release authority, see section 135-85.

Note 2: If excess amounts are paid in relation to a release authority:

(a) the excess is assessable income (see section 304-20 of the Income Tax Assessment Act 1997); and

(b) you are liable to an administrative penalty (see section 288-100 in this Schedule).

(3) However, a release authority issued under item 3 of the table in subsection 135-10(1) (for debt account discharge liability) may only be given to the *superannuation provider that holds the *superannuation interest to which the debt account relates.

135-45 When Commissioner may give release authority to superannuation provider

(1) The Commissioner may, at any time, give a release authority issued under item 1 of the table in subsection 135-10(1) to one or more *superannuation providers that hold a *superannuation interest for you, if, at the end of 120 days after the date of the release authority:

(a) some or all of the *assessed Division 293 tax that is due and payable in accordance with subsection 293-65(1) or 293-70(1) (as the case requires) is unpaid; and

(b) the Commissioner reasonably believes any of the following:

(i) that you have not given the release authority to a superannuation provider that holds a superannuation interest for you in accordance with section 135-40;

(ii) that you have given the release authority to one or more superannuation providers in accordance with that section, but that the sum of the amounts to be paid by the providers under those release authorities falls short of the amount of your assessed Division 293 tax;

(iii) that the total of the *values of every superannuation interest (other than a *defined benefit interest) held for you by superannuation providers to which the release authority has been given falls short of the amount of your assessed Division 293 tax.

Note: No payment may be made from a defined benefit interest: see subsection 135-75(4).

(2) The Commissioner may request the *superannuation provider, in writing, to pay a specified amount in relation to the release authority.

Note: For the amount that the provider pays under a release authority, see section 135-85.

Subdivision 135-C - Release of superannuation money under a release authority

Guide to Subdivision 135-C

135-70 What this Subdivision is about

This Subdivision sets out a general requirement for a superannuation provider to comply with a release authority.

The Subdivision also includes provisions about how much must be paid, who it must be paid to, which interest it is to be paid from, and how the payments are treated by the Commissioner.

Table of sections

Operative provisions

135-75 Requirement for superannuation provider to release money

135-80 Compensation for acquisition of property

135-85 Release amount

135-90 How the Commissioner applies amounts received under a release authority

135-95 Defined benefit interests - releasing amounts to pay debt account discharge liability

135-100 Income tax treatment of amounts released - proportioning rule does not apply

Operative provisions

135-75 Requirement for superannuation provider to release money

(1) If:

(a) a *superannuation provider has been given a release authority in accordance with Subdivision 135-B; and

(b) the amount mentioned in section 135-85 (the release amount ) is greater than nil;

the superannuation provider must pay the release amount within 30 days after receiving the release authority.

Who superannuation provider pays the amount to

(2) The release amount must be paid to the Commissioner.

(3) However, if the release authority was:

(a) issued under item 1 of the table in subsection 135-10(1) (which is about Division 293 tax that is due and payable within 21 days); and

(b) given to the *superannuation provider by the individual under section 135-40;

the release amount may be paid to the individual.

Note 1: Section 288-95 provides for an administrative penalty for failing to comply with this section.

Note 2: For the taxation treatment of the payment, see sections 303-20 and 304-20 of the Income Tax Assessment Act 1997.

Note 3: For reporting obligations on the superannuation provider in these circumstances, see section 390-65 in this Schedule.

Which superannuation interest the amount is to be paid from

(4) The payment must be made out of one or more *superannuation interests (other than a *defined benefit interest) held by the *superannuation provider for the individual.

135-80 Compensation for acquisition of property

(1) If the operation of section 135-75 would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from an entity otherwise than on just terms (within the meaning of that paragraph), the Commonwealth is liable to pay a reasonable amount of compensation to the entity.

(2) If the Commonwealth and the entity do not agree on the amount of the compensation, the entity may institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

135-85 Release amount

(1) The amount is the least of the following amounts:

(a) the amount stated in the release authority, as issued by the Commissioner;

(b) if the individual or Commissioner requests the *superannuation provider, in writing, to pay a specified amount in relation to the release authority - that amount;

(c) the sum of the amounts covered by subsection (2) for each *superannuation interest (other than a *defined benefit interest) held by the superannuation provider for the individual in *superannuation plans.

(2) The amount covered by this subsection for a *superannuation interest at a particular time is the total amount of all the *superannuation lump sums that could be payable from the interest at that time.

135-90 How the Commissioner applies amounts received under a release authority

(1) If the Commissioner receives a payment under a release authority, it is taken for the purposes of Part IIB to have been received in respect of a current or anticipated tax debt of the individual.

Note: Part IIB is about running balance accounts and the application of payments and credits.

Exception for voluntary payments of Division 293 tax debt account

(2) However, if the Commissioner receives the payment under a release authority issued under item 2 of the table in subsection 135-10(1) in respect of a *superannuation interest, the payment is to be treated as if it were a voluntary payment under section 133-70 in relation to the debt account for that interest.

Commissioner to notify individual if payment received

(3) If:

(a) the release authority was given by the Commissioner in accordance with section 135-45; and

(b) the payment is made to the Commissioner;

the Commissioner must, as soon as possible, give the individual written notice that the payment has been made.

135-95 Defined benefit interests - releasing amounts to pay debt account discharge liability

The exclusion of *defined benefit interests from subsection 135-75(4) and paragraph 135-85(1)(c) is to be disregarded for a release authority issued under item 3 of the table in subsection 135-10(1) (about debt account discharge liability).

135-100 Income tax treatment of amounts released - proportioning rule does not apply

Section 307-125 of the Income Tax Assessment Act 1997 (the proportioning rule) does not apply to a payment made as required or permitted under this Division.

Note: Further provisions about the income tax treatment of amounts released are in sections 303-20 and 304-20 of that Act.