2004-2005-2006

The Parliament of the
Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Tax Laws Amendment (Simplified Superannuation) Bill 2006

No. , 2006

(Treasury)

A Bill for an Act to amend the law relating to taxation, superannuation, social security and veterans' entitlements, and for related purposes



Tax Laws Amendment (Simplified Superannuation) Bill 2006 No. , 2006

Tax Laws Amendment (Simplified Superannuation) Bill 2006 No. , 2006
Contents

 

1 Short title 1

 

2 Commencement 1

 

3 Schedule(s) 3
Schedule 1--Main superannuation amendments 4
Part 1--Main amendments 4
Income Tax Assessment Act 1997 4
Part 2--Main consequential amendments 137
Income Tax Assessment Act 1936 137
Income Tax Assessment Act 1997 137
Income Tax Rates Act 1986 143
Taxation Administration Act 1953 143
Part 3--Main transitional amendments 147
Income Tax (Transitional Provisions) Act 1997 147
Part 4--TFN consequentials for Division 295 158
Income Tax Assessment Act 1936 158
Superannuation Industry (Supervision) Act 1993 158
Taxation (Interest on Overpayments and Early Payments) Act 1983 161
Schedule 2--Employment termination payments 163
Part 1--Main amendments 163
Income Tax Assessment Act 1997 163
Part 2--Main transitional and consequential amendments 193
Income Tax (Transitional Provisions) Act 1997 193
Taxation Administration Act 1953 202
Schedule 3--Indexation 203
Income Tax Assessment Act 1997 203
Schedule 4--Reporting 206
Superannuation (Government Co-contribution for Low Income Earners) Act 2003 206
Superannuation Guarantee (Administration) Act 1992 206
Superannuation (Resolution of Complaints) Act 1993 206
Taxation Administration Act 1953 207
Schedule 5--Self-managed superannuation funds 215
Fringe Benefits Tax Assessment Act 1986 215
Income Tax Assessment Act 1997 215
Superannuation Industry (Supervision) Act 1993 216
Superannuation (Self Managed Superannuation Funds) Taxation Act 1987 218
Taxation Administration Act 1953 219
Schedule 6--Government Co-contribution for Low Income Earners 222
Superannuation (Government Co-contribution for Low Income Earners) Act 2003 222
Schedule 7--Portability and unclaimed money 224
Retirement Savings Accounts Act 1997 224
Superannuation (Unclaimed Money and Lost Members) Act 1999 224
Schedule 8--Social Security Act 1991 226
Part 1--Amendments commencing 20 September 2007 226
Part 2--Amendment commencing 1 July 2007 231
Schedule 9--Veterans' Entitlements Act 1986 232
Part 1--Amendments commencing 20 September 2007 232
Part 2--Amendment commencing 1 July 2007 237
Schedule 10--Definitions and related amendments 238
Income Tax Assessment Act 1997 238

Schedule 1 Main superannuation amendments
Part 1 Main amendments

Main superannuation amendments Schedule 1
Main amendments Part 1


Tax Laws Amendment (Simplified Superannuation) Bill 2006 No. , 2006

Tax Laws Amendment (Simplified Superannuation) Bill 2006 No. , 2006

Tax Laws Amendment (Simplified Superannuation) Bill 2006 No. , 2006
A Bill for an Act to amend the law relating to taxation, superannuation, social security and veterans' entitlements, and for related purposes
The Parliament of Australia enacts:

 

1 Short title

This Act may be cited as the Tax Laws Amendment (Simplified Superannuation) Act 2006.

 

2 Commencement

    (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information

Column 1
Column 2
Column 3

Provision(s)
Commencement
Date/Details

 

1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table
The day on which this Act receives the Royal Assent.

 

2. Schedules 1 to 3
The day on which this Act receives the Royal Assent.

 

3. Schedule 4, items 1 to 13
The day on which this Act receives the Royal Assent.

 

4. Schedule 4, item 14
The later of:

        (a)   at the same time as the provision(s) covered by table item 3; and
(b) immediately after the commencement of items 20 and 21 in Schedule 2 to the Tax Laws Amendment (2006 Measures No. 6) Act 2006.

However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur.

 

5. Schedule 4, items 15 and 16
The day on which this Act receives the Royal Assent.

 

6. Schedule 5, items 1 to 34
The day on which this Act receives the Royal Assent.

 

7. Schedule 5, item 35
Immediately after the provisions covered by table item 2.

 

8. Schedule 5, item 36
The day on which this Act receives the Royal Assent.

 

9. Schedules 6 and 7
The day on which this Act receives the Royal Assent.

 

10. Schedule 8, Part 1

 

20 September 2007.

 

20 September 2007

 

11. Schedule 8, Part 2

 

1 July 2007.

 

1 July 2007

 

12. Schedule 9, Part 1

 

20 September 2007.

 

20 September 2007

 

13. Schedule 9, Part 2

 

1 July 2007.

 

1 July 2007

 

14. Schedule 10
The day on which this Act receives the Royal Assent.

Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

    (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

 

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1--Main superannuation amendments
Part 1--Main amendments
Income Tax Assessment Act 1997

 

1 After Part 3-10
Insert:

Part 3-30--Superannuation
Division 280--Guide to the superannuation provisions
Table of sections

 

280-1 Effect of this Division

 

280-5 Overview
Contributions phase

 

280-10 Contributions phase--deductibility

 

280-15 Contributions phase--limits on superannuation tax concessions
Investment phase

 

280-20 Investment phase
Benefits phase

 

280-25 Benefits phase--different types of superannuation benefit

 

280-30 Benefits phase--taxation varies with age of recipient and type of benefit

 

280-35 Benefits phase--roll-overs
The regulatory scheme outside this Act

 

280-40 Other relevant legislative schemes

 

280-1 Effect of this Division

    (1) This Division is a *Guide.

    (2) Tax concessions in this Part are intended to encourage Australians to save in order to make provision for their retirement, recognising that superannuation investments, and the income from them, are quarantined for retirement.

 

280-5 Overview

    (1) There are 3 phases in the tax treatment of superannuation, as follows:

        (a)   the contributions phase;

        (b)   the investment phase;

        (c)   the benefits phase.

    (2) In the contributions phase, contributions are made to a superannuation plan in respect of a member of the plan.

    (3) In the investment phase, these contributions are invested by the superannuation provider.

    (4) In the benefits phase, these contributions, plus earnings from investing them, are usually paid as benefits to the member when he or she retires after reaching preservation age. In the event of death, the benefits are usually paid to the member's dependants.

    (5) There is also a regulatory scheme outside this Act that is relevant to the taxation treatment of superannuation. For example, other Acts set out prudential and operating standards for superannuation providers.

Contributions phase

 

280-10 Contributions phase--deductibility
Contributions that can be deducted

    (1) Employers can usually deduct contributions they make in respect of their employees. Individuals can usually deduct contributions they make in respect of themselves if less than 10% of their total assessable income (plus reportable fringe benefits) for the income year is attributable to employment or similar activities.

Other contributions cannot be deducted

    (2) Other contributions cannot be deducted. These include personal contributions made by individuals whose employment income is 10% or more of their total income, and contributions made by others in respect of them (such as contributions by a spouse or family member, or Government co-contributions).

 

280-15 Contributions phase--limits on superannuation tax concessions

    (1) There is a limit to contributions that can be made in respect of an individual in a year that receive favourable tax treatment. This limit takes the form of a tax on excessive contributions, and neutralises the favourable tax treatment arising from the excessive contributions.

    (2) If concessional contributions exceed an indexed cap, the individual concerned is taxed on the excess. This tax liability can be met by releasing money from his or her superannuation interests.

    (3) If non-concessional contributions (including any excess for the purposes of the first cap) exceed a second indexed cap, the individual is taxed on the excess. The second cap is equivalent to three times the first cap. The payment of this tax liability must be accompanied by releasing money equivalent to the liability from his or her superannuation interests.

Investment phase

 

280-20 Investment phase

    (1) Contributions that can be deducted are assessable income of the superannuation provider. Contributions that cannot be deducted are not assessable income of the superannuation provider. (There are some exceptions.)

    (2) Earnings on the investment of amounts in a superannuation plan are assessable income of the superannuation provider.

    (3) The superannuation provider's taxable income is generally taxed at the concessional rate of 15%.

    (4) However, superannuation providers pay no tax on earnings from the assets that support the payment of benefits in the form of income streams, once the income streams have commenced.

Benefits phase

 

280-25 Benefits phase--different types of superannuation benefit

Superannuation benefits can be drawn down as lump sums, income streams (such as pensions or annuities), or combinations of both. Different tax treatment may apply depending on whether a lump sum or income stream is paid.

 

280-30 Benefits phase--taxation varies with age of recipient and type of benefit

    (1) The taxation of superannuation benefits depends primarily on the age of the member.

    (2) If the member is aged 60 or over, superannuation benefits (both lump sums and income streams) are tax free if the benefits have already been subject to tax in the fund (that is, where the benefits comprise a taxed element). This covers the great majority of superannuation members.

    (3) Where a superannuation benefit contains an amount that has not been subject to tax in the fund (an untaxed element), this element is subject to tax for those aged 60 or over, though at concessional rates. This is relevant generally to those people (for example, public servants), who are members of a superannuation fund established by the Australian Government or a state government.

    (4) If the member is less than 60, superannuation benefits may receive concessional taxation treatment, though the treatment is less concessional than for those aged 60 and over.

    (5) Superannuation benefits may also include a "tax free component"; this component of the benefit is always paid tax free.

    (6) Additional tax concessions may apply when superannuation benefits are paid after a member's death.

 

280-35 Benefits phase--roll-overs

A member can "roll over" their superannuation benefits from one complying superannuation plan to another, or between different interests in the same plan. This is usually done to keep the benefits invested in the superannuation system, or to convert a lump sum to a superannuation income stream. No tax is generally payable until the benefits are finally drawn down.

The regulatory scheme outside this Act

 

280-40 Other relevant legislative schemes

    (1) The Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 regulate the prudential and operating standards for superannuation providers. Concessional tax treatment is generally available only if providers comply with these standards.

    (2) Other legislative schemes relevant to superannuation include the following:

        (a)   the Superannuation Guarantee (Administration) Act 1992, which requires that employers provide a minimum level of superannuation contributions for each of their eligible employees;

        (b)   the Superannuation (Government Co-contribution for Low Income Earners) Act 2003, which provides for Government co-contributions to low income earners' superannuation;

        (c)   the Small Superannuation Accounts Act 1995, which provides a facility to accept payments of superannuation guarantee shortfalls;

        (d)   the Superannuation (Unclaimed Money and Lost Members) Act 1999, which provides for the payment of unclaimed superannuation money, and the maintenance of a register of lost members.

Division 290--Contributions to superannuation funds
Table of Subdivisions

Guide to Division 290

 

290-A General rules

 

290-B Deduction of employer contributions and other employment-connected contributions

 

290-C Deducting personal contributions

 

290-D Tax offsets for spouse contributions
Guide to Division 290

 

290-1 What this Division is about
This Division sets out the rules for deductions and tax offsets for superannuation contributions.

Subdivision 290-A--General rules
Table of sections

 

290-5 Non-application to roll-over superannuation benefits etc.

 

290-10 No deductions other than under this Division

 

290-5 Non-application to roll-over superannuation benefits etc.

This Division does not apply to a contribution that is any of the following:

        (a)   a *roll-over superannuation benefit;

        (b)   a *superannuation lump sum that is paid from a *foreign superannuation fund.

 

290-10 No deductions other than under this Division

    (1) You cannot deduct under this Act an amount you pay as a contribution to a *complying superannuation fund or *RSA, except as provided by this Division.

    (2) You cannot deduct under this Act an amount you pay as a contribution to a *non-complying superannuation fund, except as provided by this Division.

Note: Under Subdivision 290-B (Deduction of employer contributions and other employment-connected contributions), you may be able to deduct contributions you make to a non-complying fund that you believe to be a complying fund.

Subdivision 290-B--Deduction of employer contributions and other employment-connected contributions
Table of sections
Deducting employer contributions

 

290-60 Employer contributions deductible

 

290-65 Application to employees etc.

Conditions for deducting an employer contribution

 

290-70 Assessable income or business conditions

 

290-75 Complying fund conditions

 

290-80 Age related conditions
Other employment-connected deductions

 

290-85 Contributions for former employees etc.

 

290-90 Controlling interest deductions

 

290-95 Amounts offset against superannuation guarantee charge
Returned contributions

 

290-100 Returned contributions assessable
Deducting employer contributions

 

290-60 Employer contributions deductible

    (1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for another person who is your employee when the contribution is made (regardless whether the benefits are payable to a *SIS dependant of the employee if the employee dies before or after becoming entitled to receive the benefits).

Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see sections 85-25 and 86-75 of this Act and subsection 73B(14) of the Income Tax Assessment Act 1936.

    (2) However, the conditions in sections 290-70, 290-75 and 290-80 must also be satisfied for you to deduct the contribution.

    (3) You can deduct the contribution only for the income year in which you made the contribution.

    (4) You cannot deduct the contribution if it is an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a regulated superannuation fund (within the meaning of that Act), or to an *RSA, to be held for the benefit of your *non-member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned.

 

290-65 Application to employees etc.

    (1) At a time when an individual is an employee of an entity within the expanded meaning of employee given by section 12 of the Superannuation Guarantee (Administration) Act 1992, this Subdivision applies as if the individual were an employee of the entity.

    (2) For the purposes of this Subdivision:

        (a)   in relation to a contribution by a partnership in respect of an employee of the partnership--treat the employee as an employee of the partnership; and

        (b)   in relation to a contribution by a partner in a partnership in respect of an employee of the partnership--treat the employee as an employee of the partner.

Conditions for deducting an employer contribution

 

290-70 Assessable income or business conditions

To deduct the contribution, the employee must be:

        (a)   engaged in producing your assessable income; or

        (b)   an Australian resident who is engaged in your business.

 

290-75 Complying fund conditions

    (1) If the contribution was made to a *superannuation fund, at least one of these conditions must be satisfied:

        (a)   the fund was a *complying superannuation fund for the income year of the fund in which you made the contribution;

        (b)   at the time you made the contribution, you had reasonable grounds to believe that the fund was a complying superannuation fund for that income year;

        (c)   at or before the time you made the contribution, you obtained a written statement (given by or on behalf of the trustee of the fund) that the fund:

        (i)   was a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); and

        (ii)   was not subject to a direction under section 63 of that Act (which prevents a fund from accepting employer contributions).

    (2) However, the condition in paragraph (1)(b) or (c) cannot be satisfied if, when the contribution was made:

        (a)   you were:

        (i)   the trustee or the manager of the fund; or

        (ii)   an *associate of the trustee or the manager of the fund; and

        (b)   you had reasonable grounds to believe that:

        (i)   the fund was not a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or

        (ii)   the fund was operating in contravention of a regulatory provision (within the meaning of section 38A of that Act).

    (3) For the purposes of subparagraph (2)(b)(ii), a contravention of the Superannuation Industry (Supervision) Act 1993 or regulations made under it is to be ignored unless the contravention is:

        (a)   an offence; or

        (b)   a contravention of a civil penalty provision of that Act or those regulations.

    (4) For the purposes of subparagraph (2)(b)(ii), it is sufficient if a contravention is established on the balance of probabilities.

 

290-80 Age related conditions

    (1) To deduct the contribution, either:

        (a)   you must have made the contribution on or before the day that is 28 days after the end of the month in which the employee turns 75; or

        (b)   you must have been required to make the contribution by an industrial award, determination or notional agreement preserving State awards (within the meaning given by Schedule 8 to the Workplace Relations Act 1996) that is in force under an *Australian law.

    (2) If only paragraph (1)(b) applies, you can deduct only the amount of the contribution that is required by the industrial award, determination or notional agreement preserving State awards.

Note: An industrial agreement, such as an Australian Workplace Agreement, Collective Agreement or preserved State agreement under the Workplace Relations Act 1996, or a similar agreement made under a State law, is not an award or determination.

Other employment-connected deductions

 

290-85 Contributions for former employees etc.

    (1) Section 290-60 applies as modified by this section if a contribution you make in respect of another person:

        (a)   reduces your charge percentage under sections 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the other person because of section 15B of that Act; or

        (b)   is a one-off payment in lieu of salary or wages that relate to a period of service during which the other person was your employee.

    (2) Treat the other person as your employee for the purposes of subsection 290-60(1).

    (3) Despite subsection 290-60(2), the condition in section 290-70 must be satisfied only at the most recent time when the other person was your employee (apart from subsection (2) of this section).

 

290-90 Controlling interest deductions

    (1) Section 290-60 applies as modified by this section if you make a contribution in respect of another person at a time, and at that time:

        (a)   the other person is an employee of a company in which you have a controlling interest; or

        (b)   you are connected to the other person in the circumstances set out in subsection (5); or

        (c)   you are a company connected to the other person in the circumstances described in subsection (6).

    (2) Treat the other person as your employee at that time for the purposes of subsection 290-60(1).

Note 1: A deduction may be denied by section 85-25 if the employee is your associate.

Note 2: Section 86-60 (read together with section 86-75) limits the extent to which superannuation contributions by personal service entities are allowable deductions.

    (3) Despite subsection 290-60(2), for you to deduct the contribution the condition in subsection (4) needs to be satisfied instead of the condition in section 290-70.

    (4) The other person must be either:

        (a)   engaged in producing the assessable income of the other person's employer; or

        (b)   an Australian resident engaged in the business of the other person's employer.

    (5) For the purposes of paragraph (1)(b), the circumstances are:

        (a)   you are the beneficial owner of shares in a company of which the other person is an employee, but you do not have a controlling interest in the company; and

        (b)   you are at *arm's length with the other person in relation to the contribution; and

        (c)   neither the other person, nor a *relative of the other person:

        (i)   has set apart an amount as a fund, or has made a contribution to a fund, for the purpose of providing *superannuation benefits for you or a relative of yours; or

        (ii)   has made an *arrangement under which the other person or relative will or may do so.

Company controlling interest deductions

    (6) For the purposes of paragraph (1)(c), the circumstances are:

        (a)   the other person is an employee of an entity that has a controlling interest in the company; or

        (b)   an entity that has a controlling interest in the company also has a controlling interest in a company of which the other person is an employee.

 

290-95 Amounts offset against superannuation guarantee charge

You cannot deduct a contribution under this Act if you elect under subsection 23A(1) of the Superannuation Guarantee (Administration) Act 1992 that the contribution be offset against your liability to pay superannuation guarantee charge.

Note: You cannot deduct a charge imposed by the Superannuation Guarantee Charge Act 1992: see section 26-95.

Returned contributions

 

290-100 Returned contributions assessable

    (1) Your assessable income includes a payment, or the value of a benefit, you receive in the income year so far as it reasonably represents the direct or indirect return of:

        (a)   a contribution for which you or another entity have deducted or can deduct an amount for any income year; or

        (b)   earnings on a contribution of that kind.

Note: An example of an indirect return of a contribution is if the fund to which it was made transfers to another fund assets that include the contribution, and the other fund returns the contribution to the person who made it.

    (2) Subsection (1) does not apply if you receive the payment, or the value of the benefit, as a *superannuation benefit.

Subdivision 290-C--Deducting personal contributions
Table of sections

 

290-150 Personal contributions deductible
Conditions for deducting a personal contribution

 

290-155 Complying superannuation fund condition

 

290-160 Maximum earnings as employee condition

 

290-165 Age-related conditions

 

290-170 Notice of intent to deduct conditions

 

290-175 Deduction limited by amount specified in notice

 

290-180 Notice may be varied but not revoked or withdrawn

 

290-150 Personal contributions deductible

    (1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for yourself (regardless whether the benefits are payable to your *SIS dependants if you die before or after becoming entitled to receive the benefits).

Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see section 26-55 of this Act.

    (2) However, the conditions in sections 290-155, 290-160, 290-165 and 290-170 must also be satisfied for you to deduct the contribution.

    (3) You can deduct the contribution only for the income year in which you made the contribution.

Conditions for deducting a personal contribution

 

290-155 Complying superannuation fund condition

If the contribution is made to a *superannuation fund, it must be a *complying superannuation fund for the income year of the fund in which you made the contribution.

 

290-160 Maximum earnings as employee condition

    (1) This section applies if:

        (a)   in the income year in which you make the contribution, you engage in any of these activities:

        (i)   holding an office or appointment;

        (ii)   performing functions or duties;

(iii) engaging in work;

        (iv)   doing acts or things; and

        (b)   the activities result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted).

    (2) To deduct the contribution, less than 10% of the total of the following must be attributable to the activities:

        (a)   your assessable income for the income year;

        (b)   your *reportable fringe benefits total for the income year.

 

290-165 Age-related conditions

    (1) If you were under the age of 18 at the end of the income year in which you made the contribution, you must have *derived income in the income year:

        (a)   from the carrying on of a *business; or

        (b)   attributable to activities covered by subsection 290-160(1).

    (2) In any other case, you must have made the contribution on or before the day that is 28 days after the end of the month in which you turn 75.

 

290-170 Notice of intent to deduct conditions
Deductibility of contributions

    (1) To deduct the contribution, or a part of the contribution:

        (a)   you must give to the trustee of the fund or the *RSA provider a valid notice, in the *approved form, of your intention to claim the deduction; and

        (b)   the notice must be given before:

        (i)   if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year--the end of that day; or

        (ii)   otherwise--the end of the next income year; and

        (c)   the trustee or provider must have given you an acknowledgment of receipt of the notice.

Validity of notices

    (2) The notice is not valid if at least one of these conditions is satisfied:

        (a)   the notice is not in respect of the contribution;

        (b)   the notice includes all or a part of an amount covered by a previous notice;

        (c)   when you gave the notice:

        (i)   you were not a member of the fund or the holder of the *RSA; or

        (ii)   the trustee or *RSA provider no longer holds the contribution; or

(iii) the trustee or RSA provider has begun to pay a *superannuation income stream based in whole or part on the contributions;

        (d)   before you gave the notice:

        (i)   you had made a contributions-splitting application (within the meaning given by the regulations) in relation to the contribution; and

        (ii)   the trustee or RSA provider had not rejected the application.

Acknowledgment of notice

    (3) The trustee or provider must, without delay, give you an acknowledgment of a valid notice, subject to subsection (4).

    (4) The trustee or provider may refuse to give you an acknowledgment of receipt of a valid notice if the *value of the *superannuation interest into which the contribution is made, at the end of the day on which the trustee or *RSA provider received the notice, is less than the tax that would be payable in respect of your contribution (or part of the contribution) if the trustee or provider were to acknowledge receipt of the notice.

 

290-175 Deduction limited by amount specified in notice

You cannot deduct more for the contribution (or a part of the contribution) than the amount stated in the notice.

 

290-180 Notice may be varied but not revoked or withdrawn

    (1) You cannot revoke or withdraw a valid notice in relation to the contribution (or a part of the contribution).

    (2) You can vary a valid notice, but only so as to reduce the amount stated in relation to the contribution (including to nil). You do so by giving notice to the trustee or the *RSA provider in the *approved form.

    (3) However, you cannot vary a valid notice after:

        (a)   if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year--the end of that day; or

        (b)   otherwise--the end of the next income year.

    (4) Subsection (3) does not apply to a variation if:

        (a)   you claimed a deduction for the contribution (or a part of the contribution); and

        (b)   the deduction is not allowable (in whole or in part); and

        (c)   the variation reduces the amount stated in relation to the contribution by the amount not allowable as a deduction.

Subdivision 290-D--Tax offsets for spouse contributions
Table of sections

 

290-230 Offset for spouse contribution

 

290-235 Limit on amount of tax offsets

 

290-240 Tax file number

 

290-230 Offset for spouse contribution

    (1) You are entitled to a *tax offset for an income year for a contribution you make in the income year to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for your *spouse (regardless whether the benefits are payable to your spouse's *SIS dependants if your spouse dies before or after becoming entitled to receive the benefits).

    (2) You are entitled to the *tax offset only if:

        (a)   he or she was your *spouse when you made the contribution; and

        (b)   both you and your spouse were Australian residents when you made the contribution; and

        (c)   the total of your spouse's assessable income and *reportable fringe benefits total for the income year is less than $13,800; and

        (d)   you have not deducted and cannot deduct an amount for the contribution under section 290-60 (employer contributions); and

        (e)   if the contribution is made to a *superannuation fund--it is a *complying superannuation fund for the income year of the fund in which you make the contribution.

    (3) You are not entitled to the *tax offset if, when you make the contribution, you are living separately and apart from your *spouse on a permanent basis.

    (4) You are not entitled to the *tax offset for an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a regulated superannuation fund (within the meaning of that Act), or to an *RSA, to be held for the benefit of your *non-member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned.

 

290-235 Limit on amount of tax offsets

    (1) The total of the amounts of *tax offset to which you are entitled for contributions you make for an income year cannot exceed 18% of the lesser of the following:

        (a)   $3,000 reduced by the amount (if any) by which the total mentioned in paragraph 290-230(2)(c) for the income year exceeds $10,800;

        (b)   the sum of the *spouse contributions you make in the income year.

    (2) The maximum *tax offset to which you are entitled for an income year is $540, even if you are entitled to a tax offset for more than 1 *spouse.

 

290-240 Tax file number

If you are entitled to the *tax offset for the contribution, you may, with your *spouse's consent, quote your spouse's *tax file number to the trustee (or *RSA provider) of the *superannuation fund (or *RSA) to which the contribution is made.

Division 292--Excess contributions tax
Table of Subdivisions

Guide to Division 292

 

292-A Object of this Division

 

292-B Excess concessional contributions tax

 

292-C Excess non-concessional contributions tax

 

292-D Modifications for defined benefit interests

 

292-E Excess contributions tax assessments

 

292-F Amending excess contributions tax assessments

 

292-G Collection and recovery

 

292-H Other provisions
Guide to Division 292

 

292-1 What this Division is about
This Division limits the superannuation contributions made in a financial year for a person that receive concessionally taxed treatment.

Subdivision 292-A--Object of this Division
Table of sections

 

292-5 Object of this Division

 

292-5 Object of this Division

The object of this Division is to ensure that the amount of concessionally taxed *superannuation benefits that a person receives results from superannuation contributions that have been made gradually over the course of the person's life.

Subdivision 292-B--Excess concessional contributions tax

 

292-10 What this Subdivision is about
This Subdivision defines concessional contributions and excess concessional contributions, and sets liability to pay excess concessional contributions tax.

Table of sections
Operative provisions

 

292-15 Liability for excess concessional contributions tax

 

292-20 Your excess concessional contributions for a financial year

 

292-25 Your concessional contributions for a financial year
Operative provisions

 

292-15 Liability for excess concessional contributions tax

You are liable to pay *excess concessional contributions tax imposed by the Superannuation (Excess Concessional Contributions Tax) Act 2006 if you have *excess concessional contributions for a *financial year.

Note: The amount of the tax is set out in that Act.

 

292-20 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 for the 2007-2008 *financial year is $50,000. This amount is indexed annually.

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.

Note 2: For transitional rules about the period from 1 July 2007 to 30 June 2012, see section 292-20 of the Income Tax (Transitional Provisions) Act 1997.

 

292-25 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 292-D.

    (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; 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 (other than an amount paid for or by you to the plan) to the extent to which the allocated amount exceeds an amount that, according to rules specified in the regulations, is reasonable having regard to:

        (a)   the amounts paid for or by you to the superannuation plan; and

        (b)   the plan's investment earnings relating to your *superannuation interest or interests in the plan; and

        (c)   any other relevant matters.

    (4) Disregard Subdivision 295-D for the purposes of paragraph (2)(b).

Subdivision 292-C--Excess non-concessional contributions tax

 

292-75 What this Subdivision is about
This Subdivision defines non-concessional contributions and excess non-concessional contributions, and sets liability to pay excess non-concessional contributions tax.

Table of sections
Operative provisions

 

292-80 Liability for excess non-concessional contributions tax

 

292-85 Your excess non-concessional contributions for a financial year

 

292-90 Your non-concessional contributions for a financial year

 

292-95 Contributions arising from structured settlements or orders for personal injuries

 

292-100 Contribution relating to some CGT small business concessions

 

292-105 CGT cap amount
Operative provisions

 

292-80 Liability for excess non-concessional contributions tax

You are liable to pay *excess non-concessional contributions tax imposed by the Superannuation (Excess Non-concessional Contributions Tax) Act 2006 if you have *excess non-concessional contributions for a *financial year.

Note: The amount of the tax is set out in that Act.

 

292-85 Your excess non-concessional contributions for a financial year

    (1) You have excess non-concessional contributions for a *financial year if the amount of your *non-concessional contributions for the year exceeds your *non-concessional contributions cap for the year. The amount of the excess non-concessional contributions is the amount of the excess.

    (2) Your non-concessional contributions cap for the year is the amount that is 3 times your *concessional contributions cap for the year.

    (3) However, subsection (4) applies instead of subsection (2) in determining your non-concessional contributions cap for a *financial year (the first year) if:

        (a)   your *non-concessional contributions for the first year exceed the amount mentioned in subsection (2) for that year; and

        (b)   you are under 65 years at any time in the first year; and

        (c)   a previous operation of subsection (4) does not determine your non-concessional contributions cap for the first year.

    (4) Work out your non-concessional contributions cap for the first year and for the following 2 *financial years (the second year and third year) as follows:

        (a)   your cap for the first year is 3 times the amount mentioned in subsection (2) for the first year;

        (b)   your cap for the second year is:

        (i)   if your *non-concessional contributions for the first year fall short of your cap for the first year (worked out under paragraph (a))--the shortfall; or

        (ii)   otherwise--nil;

        (c)   your cap for the third year is:

        (i)   if your *non-concessional contributions for the second year fall short of your cap for the second year (worked out under paragraph (b))--the shortfall; or

        (ii)   otherwise--nil.

 

292-90 Your non-concessional contributions for a financial year

    (1) The amount of your non-concessional contributions for a *financial year is the sum of:

        (a)   each contribution covered under subsection (2); and

        (b)   the amount of your *excess concessional contributions (if any) for the financial year.

    (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 not included in the assessable income of the *superannuation provider in relation to the *superannuation plan; and

        (c)   it is not any of the following:

        (i)   a Government co-contribution made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003;

        (ii)   a contribution covered under section 292-95 (payments that relate to structured settlements or orders for personal injuries);

(iii) a contribution covered under section 292-100 (certain CGT-related payments), to the extent that it does not exceed your *CGT cap amount when it is made;

        (iv)   a contribution made to a *constitutionally protected fund (other than a contribution included in the *contributions segment of your *superannuation interest in the fund);

        (v)   contributions not included in the assessable income of the superannuation provider in relation to the superannuation plan because of a choice made under section 295-180;

(vi) a contribution that is a *roll-over superannuation benefit.

    (3) Disregard Subdivision 295-D for the purposes of paragraph (2)(b).

 

292-95 Contributions arising from structured settlements or orders for personal injuries

    (1) A contribution is covered under this section if:

        (a)   the contribution arises from:

        (i)   the settlement of a claim that satisfies the conditions in subsection (3); or

        (ii)   the settlement of a claim in relation to a personal injury suffered by you under a law of the Commonwealth or of a State or Territory relating to workers compensation; or

(iii) the order of a court that satisfies the conditions in subsection (4); and

        (b)   the contribution is made within 90 days after the later of the following:

        (i)   the day of receipt of the payment from which the contribution is made; or

        (ii)   in relation to subparagraph (a)(i) or (iii)--the day mentioned in subsection (2); and

        (c)   2 legally qualified medical practitioners have certified that, because of the personal injury, it is unlikely that you can ever be *gainfully employed in a capacity for which you are reasonably qualified because of education, experience or training; and

        (d)   no later than the time the contribution is made to a *superannuation plan, you or your *legal personal representative notify the *superannuation provider in relation to the plan, in the *approved form, that this section is to apply to the contribution.

    (2) For the purposes of subparagraph (1)(b)(ii), the day is:

        (a)   for a settlement mentioned in subparagraph (a)(i):

        (i)   the day on which the agreement mentioned in paragraph (3)(c) was entered into; or

        (ii)   if that agreement depends, for its effectiveness, on being approved (however described) by an order of a court, or on being embodied in a consent order made by a court--the day on which that order was made; or

        (b)   for an order mentioned in subparagraph (1)(a)(iii)--the day on which the order was made.

    (3) For the purposes of subparagraph (1)(a)(i), the conditions are as follows:

        (a)   the claim:

        (i)   is for compensation or damages for, or in respect of, personal injury suffered by you; and

        (ii)   is made by you or your *legal personal representative;

        (b)   the claim is based on the commission of a wrong, or on a right created by statute;

        (c)   the settlement takes the form of a written agreement between the parties to the claim (whether or not that agreement is approved by an order of a court, or is embodied in a consent order made by a court).

    (4) For the purposes of subparagraph (1)(a)(iii), the conditions are as follows:

        (a)   the order is made in respect of a claim that:

        (i)   is for compensation or damages for, or in respect of, personal injury suffered by you; and

        (ii)   is made by you or your *legal personal representative;

        (b)   the claim is based on the commission of a wrong, or on a right created by statute;

        (c)   the order is not an order approving or endorsing an agreement as mentioned in paragraph (3)(c).

    (5) If a claim is both:

        (a)   for compensation or damages for personal injury suffered by you; and

        (b)   for some other remedy (for example, compensation or damages for loss of, or damage to, property);
subsections (3) and (4) apply to the claim, but only to the extent that it relates to the compensation or damages referred to in paragraph (a), and only to amounts that, in the settlement agreement, or in the order, are identified as being solely in payment of that compensation or those damages.

 

292-100 Contribution relating to some CGT small business concessions

    (1) A contribution is covered under this section if:

        (a)   the contribution is made by you to a *complying superannuation plan in respect of you in a *financial year; and

        (b)   the requirement in subsection (2), (4), (7) or (8) is met; and

        (c)   you choose, in accordance with subsection (9), to apply this section to an amount that is all or part of the contribution.

    (2) The requirement in this subsection is met if:

        (a)   the contribution is equal to all or part of the *capital proceeds from a *CGT event for which you can disregard any *capital gain under section 152-105 (or would be able to do so, assuming that a capital gain arose from the event); and

        (b)   the contribution is made no later than either of the following:

        (i)   the day you are required to lodge your tax return for the income year in which the CGT event happened;

        (ii)   30 days after the day you receive the capital proceeds.

    (3) For the purposes of paragraph (2)(a), ignore the requirement in paragraph 152-105(b) if you are permanently incapacitated at the time of the *CGT event but were not permanently incapacitated at the time the relevant *CGT asset was acquired.

    (4) The requirement in this subsection is met if:

        (a)   just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under section 152-110, disregard any *capital gain arising from the CGT event (or would be able to do so, assuming that a capital gain arose from the event); and

        (b)   the entity makes a payment to you within 2 years after the CGT event; and

        (c)   the contribution is equal to all or part of your stakeholder's control percentage (within the meaning of subsection 152-125(3)) of the *capital proceeds from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and

        (d)   the contribution is made within 30 days after the payment mentioned in paragraph (b).

    (5) In determining whether the conditions in subsection (2) or (4) are satisfied for a *CGT event in relation to a *pre-CGT asset, treat the asset as a *post-CGT asset.

    (6) For the purposes of paragraph (4)(a), ignore the requirement in paragraph 152-110(1)(b) if a *controlling individual was permanently incapacitated at the time of the *CGT event but was not permanently incapacitated when the relevant *CGT asset was acquired.

    (7) The requirement in this subsection is met if:

        (a)   the contribution is equal to all or part of the *capital gain from a *CGT event that you disregarded under subsection 152-305(1); and

        (b)   the contribution is made no later than either of the following:

        (i)   the day you are required to lodge your tax return for the income year in which the CGT event happened;

        (ii)   30 days after the day you receive the *capital proceeds from the CGT event.

    (8) The requirement in this subsection is met if:

        (a)   just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under subsection 152-305(2), disregard all or part of a *capital gain arising from the CGT event; and

        (b)   the entity makes a payment to you that satisfies the conditions in section 152-325; and

        (c)   the contribution is equal to all or part of the capital gain arising from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and

        (d)   the contribution is made within 30 days after the payment mentioned in paragraph (b).

    (9) To make a choice for the purposes of paragraph (1)(c), you must:

        (a)   make the choice in the *approved form; and

        (b)   give it to the *superannuation provider in relation to the *complying superannuation plan on or before the time when the contribution is made.

 

292-105 CGT cap amount

    (1) Your CGT cap amount at the start of the 2007-2008 *financial year is $1,000,000.

Note: For transitional rules about contributions made in the period from 10 May 2006 to 30 June 2007, see section 292-80 of the Income Tax (Transitional Provisions) Act 1997.

Reductions and increases

    (2) If a contribution covered by section 292-100 is made in respect of you at a time, reduce your CGT cap amount just after that time:

        (a)   if the contribution falls short of your *CGT cap amount at that time--by the amount of the contribution; or

        (b)   otherwise--to nil.

    (3) At the start of each *financial year after the 2007-2008 financial year, increase your CGT cap amount by the amount (if any) by which the index amount for that financial year exceeds the index amount for the previous financial year.

    (4) For the purposes of subsection (3), the index amount for the 2007-2008 *financial year is $1,000,000. The index amount is then indexed annually.

Note: Subdivision 960-M shows how to index amounts. However, annual indexation does not necessarily increase the index amount: see section 960-285.

Subdivision 292-D--Modifications for defined benefit interests

 

292-155 What this Subdivision is about
This Subdivision modifies the meaning of concessional contributions relating to defined benefits interests.

Table of sections
Operative provisions

 

292-160 Application

 

292-165 Concessional contributions--special rules for defined benefit interests

 

292-170 Notional taxed contributions

 

292-175 Defined benefit interest
Operative provisions

 

292-160 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.

 

292-165 Concessional contributions--special rules for defined benefit interests

Despite section 292-25, the amount of your concessional contributions for the *financial year is the sum of:

        (a)   the contributions covered by subsection 292-25(2), and the amounts covered by subsection 292-25(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.

 

292-170 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.

    (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 person 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.

    (6) Despite subsection (1), your notional taxed contributions for the *financial year in respect of the *defined benefit interest are equal to your *concessional contributions cap for the financial year if:

        (a)   this Subdivision applies in relation to you because you have a defined benefit interest in a financial year; and

        (b)   apart from this subsection, the notional taxed contributions for the financial year in respect of the defined benefit interest exceed your concessional contributions cap for the financial year; and

        (c)   either:

        (i)   you held the defined benefit interest in a *superannuation fund on 5 September 2006; or

        (ii)   all the requirements in subsection (7) are satisfied; and

        (d)   if subparagraph (c)(i) applies and the rules of the superannuation fund have changed since 5 September 2006:

        (i)   the notional taxed contributions mentioned in paragraph (b) do not exceed what they would have been if the rules of the fund had not changed since 5 September 2006; or

        (ii)   all changes to those rules since 5 September 2006 are of a kind specified in the regulations.

    (7) For the purposes of subparagraph (6)(c)(ii), the requirements are as follows:

        (a)   you held a *defined benefit interest (the original interest) in a *superannuation fund (the original fund) on 5 September 2006;

        (b)   the defined benefit interest mentioned in paragraph (6)(a) (the current interest) is in a different superannuation fund (the current fund);

        (c)   the entire *value of the original interest was transferred to the current interest after 5 September 2006;

        (d)   your rights under the current interest are equivalent to your rights under the original interest;

        (e)   the notional taxed contributions mentioned in paragraph (6)(b) do not exceed what they would have been if:

        (i)   the transfer mentioned in paragraph (c) had not taken place; and

        (ii)   the rules of the original fund had not changed since 5 September 2006, or all changes to those rules since 5 September 2006 are of a kind specified in the regulations;

        (f)   the requirements (if any) specified in the regulations are satisfied.

 

292-175 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 292-E--Excess contributions tax assessments
Guide to Subdivision 292-E

 

292-225 What this Subdivision is about
The Commissioner may make an assessment of a person's liability to pay excess contributions tax, and the excess contributions on which that liability is based.

Table of sections
Operative provisions

 

292-230 Commissioner must make an excess contributions tax assessment

 

292-235 Part-year assessment

 

292-240 Validity of assessment

 

292-245 Objections

 

292-250 Evidence
Operative provisions

 

292-230 Commissioner must make an excess contributions tax assessment

    (1) The Commissioner must make an assessment (an excess contributions tax assessment) of:

        (a)   if a person has *excess concessional contributions for a *financial year--the amount of the excess concessional contributions; and

        (b)   the amount (if any) of *excess concessional contributions tax which the person is liable to pay in relation to the financial year.

    (2) The Commissioner must make an assessment (also an excess contributions tax assessment) of:

        (a)   if a person has *excess non-concessional contributions for a financial year--the amount of the excess non-concessional contributions; and

        (b)   the amount (if any) of *excess non-concessional contributions tax which the person is liable to pay in relation to the financial year.

    (3) The Commissioner must give the person notice in writing of an *excess contributions tax assessment as soon as practicable after making the assessment.

    (4) The notice may be included in a notice of any other assessment under this Act (including an assessment under this section).

 

292-235 Part-year assessment

    (1) The Commissioner may, at any time during a *financial year (the actual financial year), make an assessment of the matters mentioned in subsection 292-230(1) for a person for a particular period within that year as if the beginning and end of that period were the beginning and end of a financial year.

    (2) This Division applies, for the purposes of that assessment, as if:

        (a)   the start and end of the period were the start and end of a *financial year; and

        (b)   the assessment were an excess contributions tax assessment for that financial year.

    (3) If the Commissioner makes an assessment under subsection (1), he or she must make an assessment under section 292-230 in relation to the actual financial year as soon as possible after the end of that year.

    (4) However, the Commissioner does not need to make an assessment mentioned in subsection (3) if he or she is satisfied that the assessment would not differ in a material way from the assessment under subsection (1).

 

292-240 Validity of assessment

The validity of an *excess contributions tax assessment is not affected because any of the provisions of this Act have not been complied with.

 

292-245 Objections

If a person is dissatisfied with an *excess contributions tax assessment made in relation to the person, the person may object against the assessment in the manner set out in Part IVC of the Taxation Administration Act 1953.

 

292-250 Evidence

Section 177 of the Income Tax Assessment Act 1936 applies as if a reference in that section to an assessment or a notice of assessment included a reference to an *excess contributions tax assessment or a notice of an excess contributions tax assessment, as required.

Subdivision 292-F--Amending excess contributions tax assessments
Guide to Subdivision 292-F

 

292-300 What this Subdivision is about
The Commissioner may amend excess contributions tax assessments within certain time limits.

Table of sections
Operative provisions

 

292-305 Amendments within 4 years of the original assessment

 

292-310 Amended assessments are treated as excess contributions tax assessments

 

292-315 Later amendments--on request

 

292-320 Later amendments--fraud or evasion

 

292-325 Further amendment of an amended particular

 

292-330 Amendment on review etc.

Operative provisions

 

292-305 Amendments within 4 years of the original assessment

    (1) The Commissioner may amend an *excess contributions tax assessment for a person for a *financial year at any time during the period of 4 years after the *original excess contributions tax assessment day for the person for that year.

    (2) The original excess contributions tax assessment day for a person for a *financial year is the day on which the Commissioner gives the first *excess contributions tax assessment to the person for the financial year.

 

292-310 Amended assessments are treated as excess contributions tax assessments

    (1) Once an amended *excess contributions tax assessment for a person for a *financial year is made, it is taken to be an excess contributions tax assessment for the person for the year.

    (2) If the Commissioner amends a person's *excess contributions tax assessment, the Commissioner must give the person notice in writing of the amendment as soon as practicable after making the amendment.

    (3) The notice may be included in a notice of any other assessment under this Act.

 

292-315 Later amendments--on request

The Commissioner may amend an *excess contributions tax assessment for a person for a *financial year after the end of the period of 4 years after the *original excess contributions tax assessment day for the person for the year if, within that 4 year period:

        (a)   the person applies for the amendment in the *approved form; and

        (b)   the person gives the Commissioner all the information necessary for making the amendment.

 

292-320 Later amendments--fraud or evasion

    (1) If:

        (a)   a person (or a *superannuation provider covered under subsection (2)) does not make a full and true disclosure to the Commissioner of the information necessary for an *excess contributions tax assessment for the person for a *financial year; and

        (b)   in making the assessment, the Commissioner makes an under-assessment; and

        (c)   the Commissioner is of the opinion that the under-assessment is due to fraud or evasion;
the Commissioner may amend the assessment at any time.

    (2) A *superannuation provider is covered under this subsection if any of the following conditions are satisfied:

        (a)   contributions have been made to a *superannuation plan of the provider on behalf of the person in the *financial year;

        (b)   an amount is included in the person's *concessional contributions for the financial year under subsection 292-25(3) because the superannuation provider allocated it to the person;

        (c)   *notional taxed contributions are included in the person's concessional contributions for the financial year under section 292-165 because of the person's *defined benefit interest in a superannuation plan of the provider.

 

292-325 Further amendment of an amended particular

If:

        (a)   an *excess contributions tax assessment has been amended (the earlier amendment) in any particular; and

        (b)   the Commissioner is of the opinion that it would be just to further amend the assessment in that particular;
the Commissioner may do so within a period of 4 years after the earlier amendment.

 

292-330 Amendment on review etc.

Nothing in this Subdivision prevents the amendment of an *excess contributions tax assessment:

        (a)   to give effect to a decision on a review or appeal; or

        (b)   to reduce the assessment as a result of an objection or pending an appeal or review.

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 a statement given to the Commissioner by a superannuation provider under section 390-5 in Schedule 1 to the Taxation Administration Act 1953.

Subdivision 292-G--Collection and recovery
Guide to Subdivision 292-G

 

292-380 What this Subdivision is about
Excess contributions tax is due and payable at the end of 21 days after notice of assessment and the general interest charge applies to unpaid amounts. Money may be released from a superannuation plan to pay the tax.

Table of sections
Operative provisions

 

292-385 Due date for payment of excess contributions tax

 

292-390 General interest charge

 

292-395 Refunds of amounts overpaid

 

292-400 Security for payment of tax

 

292-405 Release authority

 

292-410 Giving a release authority to a superannuation provider

 

292-415 Superannuation provider given release authority must pay amount
Operative provisions

 

292-385 Due date for payment of excess contributions tax

*Excess contributions tax assessed for a person for a *financial year is due and payable at the end of 21 days after the Commissioner gives the person notice of the *excess contributions tax assessment.

 

292-390 General interest charge

If *excess contributions tax payable by a person remains unpaid after the time by which it is due and payable, the person is liable to pay the *general interest charge on the unpaid amount for each day in the period that:

        (a)   starts at the beginning of the day on which the excess contributions tax was due to be paid; and

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

        (i)   the excess contributions tax;

        (ii)   general interest charge on any of the excess contributions tax.

Note: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953.

 

292-395 Refunds of amounts overpaid

Section 172 of the Income Tax Assessment Act 1936 applies for the purposes of this Part as if references in that section to tax included references to *excess contributions tax.

 

292-400 Security for payment of tax

In section 213 of the Income Tax Assessment Act 1936 (under which the Commissioner may require security for the payment of income tax), a reference to income tax includes a reference to *excess contributions tax.

 

292-405 Release authority

    (1) As soon as practicable after making an *excess contributions tax assessment for a person, the Commissioner must give the person the following, in accordance with this section:

        (a)   if the person is liable to pay an amount of *excess concessional contributions tax in accordance with the assessment--a release authority in respect of the amount;

        (b)   if the person is liable to pay an amount of *excess non-concessional contributions tax in accordance with the assessment--a release authority in respect of the amount.

    (2) A release authority must:

        (a)   state the amount of *excess concessional contributions tax or *excess non-concessional contributions tax (whichever is applicable) that the person is liable to pay as a result of the assessment; and

        (b)   be dated; and

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

 

292-410 Giving a release authority to a superannuation provider

    (1) The person may give the release authority to a *superannuation provider that holds a *superannuation interest (other than a *defined benefit interest) for the person within 90 days after the date of the release authority.

Note: Excess contributions tax is due and payable at the end of 21 days after notice of assessment: see section 292-385.

    (2) However, if:

        (a)   the release authority is for *excess non-concessional contributions tax; and

        (b)   a *superannuation provider holds a *superannuation interest for the person (other than a *defined benefit interest);
the person must give the release authority to a superannuation provider holding a superannuation interest for the person (other than a defined benefit interest) within 21 days after the date of the release authority.

Note: Section 288-90 in Schedule 1 to the Taxation Administration Act 1953 provides for an administrative penalty for failing to comply with this subsection.

    (3) Subsection (4) applies if:

        (a)   the release authority is for *excess non-concessional contributions tax; and

        (b)   a *superannuation provider holds a *superannuation interest for the person (other than a *defined benefit interest); and

        (c)   any of the following conditions are satisfied:

        (i)   the person does not give the release authority to a superannuation provider holding a superannuation interest for the person within 90 days after the date of the release authority in accordance with subsection (1);

        (ii)   if the person has made one or more requests as mentioned in paragraph 292-415(1)(a) in relation to the release authority within 90 days after the date of the release authority--the total of the amounts (if any) paid by superannuation providers in relation to the release authority falls short of the amount of the excess non-concessional contributions tax stated in the release authority;

(iii) the total of the *values of every superannuation interest (other than a defined benefit interest) held for the person by a superannuation provider to which the release authority is given falls short of the amount of the excess non-concessional contributions tax stated in the release authority.

    (4) If the conditions in subsection (3) are satisfied, the Commissioner may give the release authority to one or more *superannuation providers that hold a *superannuation interest (other than a *defined benefit interest) for the person.

 

292-415 Superannuation provider given release authority must pay amount

    (1) A *superannuation provider that has been given a release authority in accordance with section 292-410 must pay to the person or the Commissioner within 30 days after receiving the release authority the least of the following amounts:

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

        (b)   the amount of *excess concessional contributions tax or *excess non-concessional contributions tax (whichever is applicable) stated in the release authority;

        (c)   the sum of the *values of every *superannuation interest (other than a *defined benefit interest) held by the superannuation provider for the person.

Note 1: Section 288-95 in Schedule 1 to the Taxation Administration Act 1953 provides for an administrative penalty for failing to comply with this subsection.

Note 2: Section 288-100 in Schedule 1 to the Taxation Administration Act 1953 provides that the person giving the release authority to the superannuation provider can be liable to an administrative penalty if excess amounts are paid in relation to the release authority.

Note 3: For reporting obligations on the superannuation provider in these circumstances, see section 390-65 in Schedule 1 to the Taxation Administration Act 1953.

Note 4: For the taxation treatment of the payment, see section 304-15.

    (2) 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 person.

    (3) If the payment is made to the Commissioner, it is taken to be made in satisfaction (in whole or part) of the person's liability for *excess concessional contributions tax or *excess non-concessional contributions tax stated in the release authority.

    (4) If:

        (a)   the release authority was given by the Commissioner in accordance with subsection 292-410(4); and

        (b)   the payment is made to the Commissioner;
the Commissioner must, as soon as possible, give the person written notice that the payment has been made.

    (5) Section 307-125 (the proportioning rule) does not apply to a payment made as required under this section.

Subdivision 292-H--Other provisions
Table of sections

 

292-465 Commissioner's discretion to disregard contributions etc. in relation to a financial year

 

292-470 Power of Commissioner to obtain information

 

292-465 Commissioner's discretion to disregard contributions etc. in relation to a financial year

    (1) If you make an application in accordance with subsection (2), the Commissioner may make a written determination that, for the purposes of this Division:

        (a)   all or part of your *concessional contributions for a *financial year is to be disregarded, or allocated instead for the purposes of another financial year specified in the determination; and

        (b)   all or part of your *non-concessional contributions for a financial year is to be disregarded, or allocated instead for the purposes of another financial year specified in the determination.

    (2) You may apply to the Commissioner in the *approved form for a determination under subsection (1). The application can only be made within:

        (a)   the period:

        (i)   starting on the day you receive an *excess contributions tax assessment for the *financial year; and

        (ii)   ending 60 days after that day; or

        (b)   a longer period allowed by the Commissioner.

    (3) The Commissioner may make the determination only if he or she considers that:

        (a)   there are special circumstances; and

        (b)   making the determination is consistent with the object of this Division.

    (4) In making the determination the Commissioner may have regard to the matters in subsections (5) and (6) and any other relevant matters.

    (5) The Commissioner may have regard to whether a contribution made in the relevant *financial year would more appropriately be allocated towards another financial year instead.

    (6) The Commissioner may have regard to 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:

        (a)   if the relevant contribution is made in respect of you by another person--the terms of any agreement or arrangement between you and that person as to the amount and timing of the contribution; and

        (b)   the extent to which you had control over the making of the contribution.

    (7) The Commissioner must give you a copy of the determination.

 

292-470 Power of Commissioner to obtain information

Section 264 of the Income Tax Assessment Act 1936 applies for the purposes of this Division as if the reference in paragraph (1)(b) of that section to a person's income or assessment were a reference to a matter relevant to the administration or operation of this Division.

Note: For superannuation providers' reporting obligations see Division 390 in Schedule 1 to the Taxation Administration Act 1953.

Division 295--Taxation of superannuation entities
Table of Subdivisions

Guide to Division 295

 

295-A Provisions of general operation

 

295-B Modifications of provisions of this Act

 

295-C Contributions included

 

295-D Contributions excluded

 

295-E Other income amounts

 

295-F Exempt income

 

295-G Deductions

 

295-H Components of taxable income

 

295-I No-TFN contributions

 

295-J Tax offset for no-TFN contributions income (TFN quoted within 4 years)
Guide to Division 295

 

295-1 What this Division is about
This Division sets out special rules about the taxation of superannuation entities.

It sets out how to calculate the taxable income of those entities and to identify the components of that taxable income for the purpose of applying the appropriate tax rate.

It sets out how to calculate the no-TFN contributions income of relevant entities for an income year for the purpose of applying the appropriate tax rate.

Subdivision 295-A--Provisions of general operation
Table of sections

 

295-5 Entities to which Division applies

 

295-10 How to work out the tax payable by superannuation entities

 

295-15 Division does not impose a tax on property of a State

 

295-20 Exempting laws ineffective

 

295-25 Assessments on basis of anticipated SIS Act notice

 

295-30 Effect of revocation etc. of SIS Act notices

 

295-35 Acronyms used in tables

 

295-5 Entities to which Division applies

    (1) This Division applies to these entities:

        (a)   a *complying superannuation fund;

        (b)   a *non-complying superannuation fund;

        (c)   a *complying approved deposit fund;

        (d)   a *non-complying approved deposit fund;

        (e)   a *pooled superannuation trust;
whether they are established by an *Australian law, by a public authority constituted by or under such a law or in some other way.

    (2) The *superannuation provider in relation to an entity referred to in paragraph (1)(a) to (d) is liable to pay tax on the taxable income of the entity.

Note: A superannuation provider in relation to an entity referred to in paragraphs (1)(a) and (b) or in relation to an RSA is liable to pay tax on the no-TFN contributions income of the entity: see section 295-605.

    (3) The trustee of a *pooled superannuation trust is liable to pay tax on the taxable income of the trust.

    (4) This Division also applies to an *RSA provider that is not a *life insurance company.

Note: Division 320 deals with RSA providers that are life insurance companies.

 

295-10 How to work out the tax payable by superannuation entities

    (1) Use this method for *superannuation funds, *approved deposit funds and *pooled superannuation trusts:

Method statement
Step 1. For a *superannuation fund, work out the *no-TFN contributions income. Apply the applicable rates as set out in the Income Tax Rates Act 1986 to that income.

Step 2. Work out the entity's assessable income and deductions taking account of the special rules in this Division. The special rules modify some provisions of this Act. They also include amounts in assessable income, allow deductions and exempt amounts from income tax.

Step 3. Work out the entity's taxable income as if its trustee:

        (a)   were an Australian resident (except where paragraph (b) applies); or

        (b)   for a *non-complying superannuation fund that is a *foreign superannuation fund for the income year--were not an Australian resident.

Step 4. Work out the *low tax component and *non-arm's length component of the taxable income of a *complying superannuation fund, *complying approved deposit fund or *pooled superannuation trust.

Step 5. Apply the applicable rates as set out in the Income Tax Rates Act 1986 to the components, or to the taxable income of a *non-complying superannuation fund or *non-complying approved deposit fund.

Step 6. Subtract the entity's *tax offsets from the step 5 amount or, for a *superannuation fund, from the sum of the fund's step 1 and step 5 amounts.

    (2) Use this method for *RSA providers:

Method statement
Step 1. Work out the entity's *no-TFN contributions income. Apply the applicable rates as set out in the Income Tax Rates Act 1986 to that income.

Step 2. Work out the entity's assessable income and deductions taking account of the special rules in this Division.

Step 3. Work out the *RSA component and *standard component of the entity's taxable income.

Step 4. Apply the applicable rates as set out in the Income Tax Rates Act 1986 to the components. The *RSA component is taxed at a concessional rate.

Step 5. Subtract the entity's *tax offsets from the sum of the entity's step 1 and step 4 amounts.

 

295-15 Division does not impose a tax on property of a State

This Division does not impose a tax on property of any kind belonging to a State (within the meaning of section 114 of the Constitution).

 

295-20 Exempting laws ineffective

A *Commonwealth law (other than this Act) does not have the effect of exempting the trustee of an entity to which this Division applies from the liability to pay tax unless it does so expressly.

 

295-25 Assessments on basis of anticipated SIS Act notice

    (1) The Commissioner may make an assessment for a fund or trust that is not a *complying superannuation fund, *complying approved deposit fund or *pooled superannuation trust for the income year as if it were such an entity if the Commissioner considers it likely that a notice will be given under section 40 of the Superannuation Industry (Supervision) Act 1993 having the effect that it will become such an entity.

    (2) However, the grounds for making an assessment under subsection (1) are taken never to have existed if:

        (a)   the Commissioner becomes satisfied that the notice will not be given; or

        (b)   *APRA does not receive the documents referred to in subsection 36(1) of the Superannuation Industry (Supervision) Act 1993 about the fund or trust before the end of 12 months after the assessment is made.

 

295-30 Effect of revocation etc. of SIS Act notices

This Division has effect as if a notice given under section 342 of the Superannuation Industry (Supervision) Act 1993 (about pre-1 July 88 funding credits) or under regulations made for the purposes of that section had never been given if:

        (a)   the notice is revoked; or

        (b)   the decision to give the notice is set aside.

 

295-35 Acronyms used in tables

In tables in this Division, these acronyms are used for these entities:

Acronyms used in tables

Item
Entity
Acronym

 

1
*Complying superannuation fund
CSF

 

2
*Non-complying superannuation fund
N-CSF

 

3
*Complying approved deposit fund
CADF

 

4
*Non-complying approved deposit fund
N-CADF

 

5
*Pooled superannuation trust
PST

Subdivision 295-B--Modifications of provisions of this Act
Table of sections

 

295-85 CGT to be primary code for calculating gains or losses

 

295-90 CGT rules for pre-30 June 1988 assets

 

295-95 Deductions related to contributions

 

295-100 Deductions for investing in PSTs and life policies

 

295-105 Distributions to PST unitholders

 

295-85 CGT to be primary code for calculating gains or losses

    (1) The modifications in subsection (2) apply if a *CGT event happens involving a *CGT asset that was owned by one of these entities just before the time of the event:

        (a)   a *complying superannuation fund;

        (b)   a *complying approved deposit fund;

        (c)   a *pooled superannuation trust.

    (2) These provisions do not apply to the *CGT event:

        (a)   sections 6-5 (about *ordinary income), 8-1 (about amounts you can deduct), and 15-15 and 25-40 (about profit-making undertakings or plans);

        (b)   sections 25A and 52 of the Income Tax Assessment Act 1936 (about profit-making undertakings or schemes).

Exceptions

    (3) The provisions referred to in subsection (2) can apply to the *CGT event if:

        (a)   any *capital gain or *capital loss from the event is attributable to currency exchange rate fluctuations; or

        (b)   the *CGT asset is one of these:

        (i)   debenture stock, a bond, *debenture, certificate of entitlement, bill of exchange, promissory note or other security;

        (ii)   a deposit with a bank, building society or other financial institution;

(iii) a loan (secured or not);

        (iv)   some other contract under which an entity is liable to pay an amount (whether the liability is secured or not).

    (4) The provisions referred to in subsection (2) can also apply to the *CGT event if a *capital gain or *capital loss from the event is disregarded because of one of the provisions in this table:

Where gain or loss disregarded because of CGT provision

Item
Provision
Brief description

 

1
Paragraph 104-15(4)(a)
Title in a CGT asset does not pass when a hire purchase or similar agreement ends

 

2
Section 118-5
Cars, motor cycles and valour decorations

 

3
Section 118-10
Collectables and personal use assets

 

4
Section 118-13
Shares in a PDF

 

5
Section 118-25
Trading stock

 

6
Section 118-30
Film copyright

 

7
Section 118-35
Research and development

 

8
Section 118-55
Foreign currency hedging gains and losses

 

9
Section 118-60
Certain gifts

 

10
Section 118-300
Insurance policies

 

11
Section 118-305
Superannuation

 

12
Section 118-310
CGT event happens to right to, or part of, RSA

 

295-90 CGT rules for pre-30 June 1988 assets

    (1) This section applies to the trustee of:

        (a)   a *complying superannuation fund; or

        (b)   a *complying approved deposit fund; or

        (c)   a *pooled superannuation trust.

    (2) Parts 3-1 and 3-3 (about capital gains and losses) apply to a *CGT asset that:

        (a)   the trustee or a former trustee owned at the end of 30 June 1988; and

        (b)   the trustee owned at the commencement of this section;
as if the trustee had *acquired the asset on 30 June 1988.

    (3) Subsection (2) does not affect how to work out the asset's *cost base or *reduced cost base.

Note: See Subdivision 295-B of the Income Tax (Transitional Provisions) Act 1997 for rules about cost base.

    (4) Subsection 104-30(5) applies to an option granted by the trustee as if the reference in that subsection to 20 September 1985 were a reference to 1 July 1988.

 

295-95 Deductions related to contributions

    (1) Provisions of this Act about deducting amounts apply to these entities as if all contributions made to them were included in their assessable income:

        (a)   *complying superannuation funds;

        (b)   *non-complying superannuation funds that are *Australian superannuation funds;

        (c)   *complying approved deposit funds;

        (d)   *non-complying approved deposit funds;

        (e)   *RSA providers.

Note 1: This means that the entities can deduct amounts incurred in obtaining the contributions.

Note 2: Examples of contributions that are not assessable are:

contributions which the contributor cannot deduct;
contributions excluded from assessable income under Subdivision 295-D.

    (2) A *superannuation fund is an Australian superannuation fund at a time, and for the income year in which that time occurs, if:

        (a)   the fund was established in Australia, or any asset of the fund is situated in Australia at that time; and

        (b)   at that time, the central management and control of the fund is ordinarily in Australia; and

        (c)   at that time either the fund had no member covered by subsection (3) (an active member) or at least 50% of:

        (i)   the total *market value of the fund's assets attributable to *superannuation interests held by active members; or

        (ii)   the sum of the amounts that would be payable to or in respect of active members if they voluntarily ceased to be members;

is attributable to superannuation interests held by active members who are Australian residents.

    (3) A member is covered by this subsection at a time if the member is:

        (a)   a contributor to the fund at that time; or

        (b)   an individual on whose behalf contributions have been made, other than an individual:

        (i)   who is a foreign resident; and

        (ii)   who is not a contributor at that time; and

(iii) for whom contributions made to the fund on the individual's behalf after the individual became a foreign resident are only payments in respect of a time when the individual was an Australian resident.

 

295-100 Deductions for investing in PSTs and life policies

    (1) Provisions of this Act about deducting amounts apply to *complying superannuation funds and *complying approved deposit funds as if *ordinary income and *statutory income received from these investments were included in their assessable income:

        (a)   units in a *pooled superannuation trust;

        (b)   *life insurance policies issued by a *life insurance company;

        (c)   an interest in a trust whose assets consist only of life insurance policies issued by a life insurance company.

Note: Income from these investments is not assessable: see for example sections 295-105 and 118-350.

    (2) A *complying superannuation fund cannot deduct an amount (otherwise than under section 295-465) for fees or charges incurred for:

        (a)   *virtual PST life insurance policies; or

        (b)   *exempt life insurance policies; or

        (c)   units in a *pooled superannuation trust that are *segregated current pension assets of the fund.

 

295-105 Distributions to PST unitholders

The assessable income of a *complying superannuation fund, *complying approved deposit fund or *pooled superannuation trust does not include amounts *derived by the entity because it holds units in a *pooled superannuation trust.

Note: These entities will not be subject to any tax liability when they dispose of the units: see subsection 295-85(2) and section 118-350.

Subdivision 295-C--Contributions included
Guide to Subdivision 295-C

 

295-155 What this Subdivision is about
There are basically 3 types of assessable contributions:

        (a)   those made by a contributor (for example, an employer) on behalf of someone else (for example, an employee); and

        (b)   those made on the contributor's own behalf for which the contributor is entitled to a deduction; and

        (c)   those transferred from a foreign superannuation fund to an Australian superannuation fund.

There are some additions and exceptions.

Table of sections
Contributions and payments

 

295-160 Contributions and payments

 

295-165 Exception--spouse contributions

 

295-170 Exception--Government co-contributions and contributions for a child

 

295-175 Exception--payments by a member spouse

 

295-180 Exception--choice to exclude certain contributions

 

295-185 Exception--temporary residents
Personal contributions and roll-over amounts

 

295-190 Personal contributions and roll-over amounts

 

295-195 Exclusion of personal contributions
Transfers from foreign funds

 

295-200 Transfers from foreign superannuation funds
Application of tables to RSA providers

 

295-205 Application of tables to RSA providers
Former constitutionally protected funds

 

295-210 Former constitutionally protected funds
Contributions and payments

 

295-160 Contributions and payments

The assessable income of an entity includes contributions or payments as set out in this table for the income year in which the contributions or payments are received.

Note: For an explanation of the acronyms used, see section 295-35.

Contributions and payments included in assessable income

Item
Assessable income of this entity:

Includes:

 

1
CSF
N-CSF that is an *Australian superannuation fund for the income year
*RSA provider
Contribution to provide *superannuation benefits for someone else (except a contribution that is a *roll-over superannuation benefit)

 

2
N-CSF that is a *foreign superannuation fund for the income year
Contribution to provide *superannuation benefits for someone else to the extent that it relates to a period when that person was:

        (a)   an Australian resident; or
(b) a foreign resident who *derives *withholding payments covered by subsection 900-12(3)
(except a contribution that is a *roll-over superannuation benefit)

 

3
CSF
CADF
*RSA provider
Payment under section 65 of the Superannuation Guarantee (Administration) Act 1992

 

4
CSF
*RSA provider
Payment under section 61 or 61A of the Small Superannuation Accounts Act 1995

 

295-165 Exception--spouse contributions

    (1) Item 1 of the table in section 295-160 does not include in assessable income a contribution made by an individual to a *complying superannuation fund or an *RSA:

        (a)   to provide *superannuation benefits for the individual's *spouse (regardless whether the benefits are payable to the individual's spouse's *SIS dependants if the individual's spouse dies before or after becoming entitled to receive the benefits); and

        (b)   that the individual cannot deduct under Subdivision 290-B.

    (2) Paragraph (1)(a) does not apply to *superannuation benefits for a *spouse living permanently separately and apart from the individual.

 

295-170 Exception--Government co-contributions and contributions for a child

    (1) Item 1 of the table in section 295-160 does not include in assessable income a contribution:

        (a)   that is a Government co-contribution made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003; or

        (b)   for the benefit of a person under 18 that is not made by or on behalf of the person's employer.

    (2) Item 4 of the table in section 295-160 does not include in assessable income a payment to the extent to which it represents a Government co-contribution or co-contributions made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003.

 

295-175 Exception--payments by a member spouse

Contributions are not included in assessable income under section 295-160 if they are an amount paid by a member spouse, as mentioned in regulations under the Family Law Act 1975, to a regulated superannuation fund (within the meaning of that Act), or to an *RSA provider, to be held for the benefit of the *non-member spouse in satisfaction of the non-member spouse's entitlement in respect of the *superannuation interest concerned.

 

295-180 Exception--choice to exclude certain contributions

    (1) Item 1 of the table in section 295-160 does not include an amount in the assessable income of a *complying superannuation fund for an income year to the extent that the trustee chooses that it not be included.

    (2) The entity that made the contributions must consent to the choice.

Note: Making this choice effectively shifts the liability for tax on the contributions to the recipient of the benefit. The benefit is treated as an element untaxed in the fund: see Subdivision 301-C.

    (3) However, the choice cannot be made for an income year for an amount that exceeds the sum of amounts covered by notices given by the trustee under section 307-285 for *superannuation benefits paid in the income year.

    (4) A choice under this section cannot be revoked or withdrawn.

    (5) A choice under this section cannot be made in relation to a *superannuation plan that comes into operation after 5 September 2006.

 

295-185 Exception--temporary residents

Item 2 of the table in section 295-160 does not include a contribution in the assessable income of an entity if the individual (for whom it was made) is a *temporary resident at the end of the income year to which the contribution relates.

Personal contributions and roll-over amounts

 

295-190 Personal contributions and roll-over amounts

    (1) The assessable income of an entity includes amounts as set out in this table.

Note: For an explanation of the acronyms used, see section 295-35.

Personal contributions and roll-over amounts included in assessable income

Item
Assessable income of this entity:

Includes:

 

1
CSF
*RSA provider
A contribution covered by a valid and acknowledged notice under section 290-170

 

2
CSF
CADF
N-CADF
*RSA provider
A *roll-over superannuation benefit that an individual is taken to receive under section 307-15 to the extent that:

        (a)   it consists of an *element untaxed in the fund; and
(b) is not an *excess untaxed roll-over amount for that individual

 

3
CSF
CADF
*RSA provider
The *taxable component of a directed termination payment (within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997)

    (2) A contribution referred to in item 1 is included in the income year in which it is received if the notice is received by the *superannuation provider by the day the provider lodges its *income tax return for that income year.

    (3) Otherwise it is included in the income year in which the notice is received.

    (4) A payment referred to in item 2 or 3 is included in the income year in which it is received by the *superannuation provider.

 

295-195 Exclusion of personal contributions
Variation notice received before return lodged

    (1) A contribution is not included in the assessable income of a *complying superannuation fund or *RSA provider to the extent that it has been reduced by a notice under section 290-180 if the notice is received by the *superannuation provider before it has lodged its *income tax return for the income year in which the contribution was made.

Variation notice received after return lodged

    (2) A contribution is not included in the assessable income of a *complying superannuation fund or *RSA provider for the income year in which the contribution was made to the extent that it has been reduced by a notice under section 290-180 if:

        (a)   the notice is received by the *superannuation provider after it has lodged its *income tax return for the income year; and

        (b)   the provider exercises the option mentioned in subsection (3).

    (3) An amount referred to in subsection (2) may, at the option of the provider, be excluded from the assessable income of the fund or *RSA provider for the income year referred to in subsection (2) if excluding it would result in a greater reduction in tax for that year than the reduction that would occur for the income year in which the notice is received if a deduction were allowed under item 2 of the table in subsection 295-490(1).

Note: The exclusion is an alternative to the fund deducting the amount under item 2 of the table in subsection 295-490(1).

Transfers from foreign funds

 

295-200 Transfers from foreign superannuation funds

    (1) The assessable income of a fund that is an *Australian superannuation fund for the income year includes an amount transferred to the fund from a fund that was a *foreign superannuation fund for the income year in relation to a member of the foreign fund to the extent that the amount transferred exceeds amounts vested in the member at the time of the transfer.

    (2) The assessable income of a fund that is a *complying superannuation fund for the income year includes so much of an amount transferred to the fund from a fund that was a *foreign superannuation fund for the income year as is specified in a choice made by a former member of the foreign fund under section 305-80.

    (3) The amount is included in the income year in which the transfer happens.

Application of tables to RSA providers

 

295-205 Application of tables to RSA providers

The tables in this Subdivision apply to *RSA providers only to the extent that amounts are paid to *RSAs they provide.

Former constitutionally protected funds

 

295-210 Former constitutionally protected funds

    (1) This section applies to a *complying superannuation fund for an income year if the fund ceased to be a *constitutionally protected fund during the year or at the end of the previous year.

    (2) The assessable income of the fund for the income year includes the sum of the *roll-over superannuation benefits to the extent that they consist of the *element untaxed in the fund of the *taxable component that would be included in that assessable income if all contributions and earnings accumulated in the fund when the fund ceased to be a *constitutionally protected fund:

        (a)   had been paid out of the fund immediately before it ceased to be a constitutionally protected fund; and

        (b)   were paid to the fund as roll-over superannuation benefits immediately after that time.

Subdivision 295-D--Contributions excluded
Table of sections

 

295-260 Transfer of liability to investment vehicle

 

295-265 Application of pre-1 July 88 funding credits

 

295-270 Anticipated funding credits

 

295-260 Transfer of liability to investment vehicle

    (1) The *superannuation provider in relation to a *complying superannuation fund or a *complying approved deposit fund (the transferor) may reduce the amount that would otherwise be included in the fund's assessable income for an income year under Subdivision 295-C by agreement with another entity (the transferee) in which it holds investments.

What the transferee must be

    (2) The transferee must be a *life insurance company or a *pooled superannuation trust.

Note: Amounts transferred are included in the transferee's assessable income: see section 295-320 (for PSTs) and paragraph 320-15(1)(i) (for life insurance companies).

Agreement requirements

    (3) The transferor may make one agreement only for an income year with a particular transferee.

    (4) An agreement:

        (a)   must be in writing, and must be signed by or for the transferor and transferee; and

        (b)   must be made by the day the transferor lodges its *income tax return for its income year to which the agreement relates; and

        (c)   cannot be revoked.

Limits on transfer

    (5) The total amount covered by the agreements cannot exceed the amount that would otherwise be included in the transferor's assessable income under Subdivision 295-C for that income year.

    (6) The amount covered by an agreement with a particular transferee cannot exceed this amount:

where:

greatest equity value is the greatest of these amounts during the transferor's income year:

        (a)   if the transferee is a *pooled superannuation trust--the *market value of the transferor's investment in units in the trust;

        (b)   if not--the market value of the transferor's investment in:

        (i)   *life insurance policies issued by the transferee; or

        (ii)   a trust whose assets consist only of life insurance policies issued by the transferee.

transferor's low tax component tax rate is the rate of tax imposed on the *low tax component of the fund's taxable income for the income year.

 

295-265 Application of pre-1 July 88 funding credits
Choice to reduce contributions included in assessable income

    (1) The *superannuation provider in relation to a *complying superannuation fund can choose to reduce the amount of contributions that would otherwise be included in the fund's assessable income for an income year under item 1 of the table in section 295-160 if it has pre-1 July 88 funding credits available for the income year.

When funding credits are available

    (2) Use this method to work out whether a fund has pre-1 July 88 funding credits available for an income year:

Method statement
Step 1. Identify the amount of pre-1 July 88 funding credits unused at the end of the previous income year.

Step 2. Index that amount.

Note: Subdivision 960-M shows you how to index amounts.

Step 3. Add any pre-1 July 88 funding credits transferred to the fund in the income year under regulations made for the purposes of subsection 342(7) of the Superannuation Industry (Supervision) Act 1993.

Step 4. Deduct from the step 3 amount:

        (a)   pre-1 July 88 funding credits transferred from the fund in the income year under regulations made for the purposes of subsection 342(7) of that Act; and

        (b)   amounts specified in a notice given to the *superannuation provider in relation to the fund under subsection 342(6) of that Act for the income year.

Step 5. The result is the pre-1 July 88 funding credits available to the fund for the income year.

That amount, reduced by any amount specified in a choice made under subsection (1) for the income year, is the amount of pre-1 July 88 funding credits unused at the end of the income year.

Note 1: Regulations under subsection 342(7) of the SIS Act allow APRA to approve transfers of pre-1 July 88 funding credits between funds.

Note 2: Subsection 342(6) of that Act covers the situation where the fund's rules are changed to produce a reduction in pre-1 July 88 funding credits and the trustee notifies APRA of the change.

    (3) If a notice is given to the *superannuation provider in relation to the fund under subsection 342(2) of the Superannuation Industry (Supervision) Act 1993 granting the trustee a pre-1 July 88 funding credit, this section applies as if the pre-1 July 88 funding credit had arisen at the beginning of the income year in which 1 July 1988 occurred.

    (4) However, if a notice is given to the *superannuation provider in relation to the fund under subsection 342(4) of the Superannuation Industry (Supervision) Act 1993 for the income year, the fund has no pre-1 July 88 funding credits.

Note: Subsection 342(4) of that Act covers the situation where the fund's rules are changed to produce a reduction in pre-1 July 88 funding credits and the provider fails to notify APRA of the change.

Limit on choice

    (5) The total amount covered by the choice cannot exceed the pre-1 July 88 funding credits available to the fund for the income year.

    (6) The total amount covered by the choice also cannot exceed the amount of contributions that would otherwise be included in the fund's assessable income for the income year under item 1 of the table in section 295-160 that are used to fund liabilities that accrued before 1 July 1988.

    (7) The regulations may prescribe either or both of the following:

        (a)   the manner in which the *superannuation provider in relation to a *superannuation fund is to work out the amount applicable to the fund under subsection (6) for an income year;

        (b)   methods (other than the method specified in subsection (6)) of working out how the provider of a superannuation fund can apply pre-1 July 88 funding credits.

    (8) Methods prescribed under paragraph (7)(b) may be applicable to particular *superannuation funds or to a class or classes of superannuation funds.

 

295-270 Anticipated funding credits

    (1) Subsection (2) has effect if the *superannuation provider in relation to a *complying superannuation fund expects a notice to be given under subsection 342(2) of the Superannuation Industry (Supervision) Act 1993 or under regulations made for the purposes of subsection 342(7) of that Act to the effect that pre-1 July 88 funding credits of a particular amount will be available to the fund for the income year.

    (2) Section 295-265 applies to the fund as if pre-1 July 88 funding credits of the anticipated amount were available to the fund for the income year (in addition to any other pre-1 July 88 funding credits available to the fund for the year).

    (3) However, section 295-265 applies to the fund for the income year as if pre-1 July 88 funding credits of the anticipated amount were not available to the fund for the income year if:

        (a)   it becomes clear that the expected notice will not be given or that the specified amount of pre-1 July 88 funding credits will not be available; or

        (b)   *APRA does not receive the things referred to in subsection 342(3) of the Superannuation Industry (Supervision) Act 1993 (for a notice expected under subsection 342(2) of that Act) or the things required to be given under regulations made for the purposes of subsection 342(7) of that Act (for a notice under those regulations) before the earlier of:

        (i)   the end of 12 months after the fund's assessment is made for the income year; and

        (ii)   the time the things are required to be given by the regulations.

Subdivision 295-E--Other income amounts
Table of sections
Amounts included

 

295-320 Other amounts included in assessable income

 

295-325 Previously complying funds

 

295-330 Previously foreign funds
Amounts excluded

 

295-335 Amounts excluded from assessable income
Amounts included

 

295-320 Other amounts included in assessable income

The assessable income of an entity includes the amounts as set out in this table.

Note: For an explanation of the acronyms used, see section 295-35.

Amounts included in assessable income

Item
Assessable income of this entity:

Includes:

For the income year:

 

1
PST
Amount transferred to it by a CSF or CADF under section 295-260
Of the PST that includes the last day of the transferor's income year to which the agreement relates

 

2
N-CSF that was a CSF for the previous income year
*Ordinary income and *statutory income from previous years worked out under section 295-325
Following the income year in which it was a CSF

 

3
CSF; or
N-CSF that is an *Australian superannuation fund for the income year
and that was a *foreign superannuation fund for the previous income year
*Ordinary income and *statutory income from previous years worked out under section 295-330
Following the income year in which it was a foreign superannuation fund

 

4
CSF
The part of a rebate or refund of an insurance premium that is attributable to an amount deducted under an item of the table in subsection 295-465(1)
In which the rebate or refund is received

 

5
*RSA provider
The part of a rebate or refund of an insurance premium that is attributable to an amount deducted under section 295-475
In which the rebate or refund is received

 

295-325 Previously complying funds

The amount of *ordinary income and *statutory income from previous years included in the assessable income of a fund in an income year under item 2 of the table in section 295-320 is:

 

295-330 Previously foreign funds

The amount of *ordinary income and *statutory income from previous years included in the assessable income of a fund in an income year under item 3 of the table in section 295-320 is:

Amounts excluded

 

295-335 Amounts excluded from assessable income

The assessable income of an entity does not include the amounts set out in this table.

Note: For an explanation of the acronyms used, see section 295-35.

Amounts excluded from assessable income

Item
This entity:

Does not include this in assessable income:

 

1
CSF
CADF
PST
A bonus on a *life insurance policy (except a reversionary bonus)

 

2
PST
Amount attributable to amounts received from a *constitutionally protected fund

 

3
*RSA provider
A bonus on a *life insurance policy that is an *RSA (except a reversionary bonus)

Subdivision 295-F--Exempt income
Table of sections

 

295-385 Income from assets set aside to meet current pension liabilities

 

295-390 Income from other assets used to meet current pension liabilities

 

295-395 Meaning of segregated non-current assets

 

295-400 Income of a PST attributable to current pension liabilities

 

295-405 Other exempt income

 

295-410 Amount credited to RSA

 

295-385 Income from assets set aside to meet current pension liabilities

    (1) The *ordinary income and *statutory income of a *complying superannuation fund for an income year is exempt from income tax to the extent that:

        (a)   it would otherwise be assessable income; and

        (b)   it is from *segregated current pension assets.

Exception

    (2) Subsection (1) does not apply to:

        (a)   *non-arm's length income; or

        (b)   amounts included in assessable income under Subdivision 295-C.

Meaning of segregated current pension assets

    (3) Assets of a *complying superannuation fund are segregated current pension assets at a time if:

        (a)   the assets are invested, held in reserve or otherwise dealt with at that time solely to enable the fund to discharge all or part of its liabilities (contingent or not) in respect of *superannuation income stream benefits that are payable by the fund at that time; and

        (b)   the trustee of the fund obtains an *actuary's certificate before the date for lodgment of the fund's *income tax return for the income year to the effect that the assets and the earnings that the actuary expects will be made from them would provide the amount required to discharge in full those liabilities, or that part of those liabilities, as they fall due.

    (4) Assets of a *complying superannuation fund are also segregated current pension assets of the fund at a time if the assets are invested, held in reserve or otherwise being dealt with at that time for the sole purpose of enabling the fund to discharge all or part of its liabilities (contingent or not), as they become due, in respect of *superannuation income stream benefits:

        (a)   that are payable by the fund at that time; and

        (b)   prescribed by the regulations for the purposes of this section.

    (5) Subsection (4) does not apply unless, at all times during the income year, the liabilities of the fund (contingent or not) to pay *superannuation income stream benefits payable by the fund were liabilities in respect of superannuation income stream benefits that are prescribed by the regulations for the purposes of this section.

 

295-390 Income from other assets used to meet current pension liabilities

    (1) A proportion of the *ordinary income and *statutory income of a *complying superannuation fund that would otherwise be assessable income is exempt from income tax under this section. The proportion is worked out under subsection (3).

Exception

    (2) Subsection (1) does not apply to:

        (a)   *non-arm's length income; or

        (b)   amounts included in assessable income under Subdivision 295-C; or

        (c)   income *derived from *segregated non-current assets; or

        (d)   income that is exempt from income tax under section 295-385.

Formula

    (3) The proportion is:

where:

average value of current pension liabilities is the average value for the income year of the fund's current liabilities (contingent or not) in respect of