Bills introduced to House of Representatives (19.6.13)
The Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 and the Superannuation (Excess Concessional Contributions Charge) Bill 2013 were introduced in the House of Reps on Wed 19.6.2013.
Currently, concessional contributions that are in excess of the annual cap are effectively taxed at the top marginal tax rate of 46.5%. The Minister for Superannuation said this is a severe penalty for individuals below the top marginal tax rate. In contrast, individuals on the top marginal rate effectively face no penalty and benefit from being able to defer the timing of their taxation. The amendments in the Bills are designed to ensure that individuals are taxed on excess concessional contributions in the same way as if they had received that money as salary or wages and had chosen to make a non-concessional contribution.
The Tax Laws Amendment Bill will amend the ITAA 1997 and the Taxation Administration Act 1953 to establish what the Government says is a fairer system for the taxation of individuals with concessional super contributions in excess of their annual cap. This Bill also allows individuals to elect to release an amount of excess concessional contributions from their superannuation interests. The other Bill imposes a charge on taxpayers who have concessional contributions in excess of their annual cap to ensure they do not receive an advantage over those taxpayers who do not exceed their annual cap.
The main Bill repeals the excess contributions tax in relation to excess concessional contributions and instead provides for excess concessional contributions to be included in an individual’s assessable income and subject to a charge to account for the deferral of tax. This charge will be imposed by the Superannuation (Excess Concessional Contributions Charge) Bill.
DATE OF EFFECT: The proposed amendments would apply in the 2013-14 income year (and the corresponding financial year) and later income years ie to super contributions made on and after 1 July 2013.
[LTN 116, 19/6/13]
Bills pass House of Representatives (20.6.13)
The Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 and the Superannuation (Excess Concessional Contributions Charge) Bill 2013 were both passed by the House of Reps without amendment on Thur 20.6.2013 and now move to the Senate.
[LTN 117, 20/6/13]
Bills pass Senate (28.6.13)
The Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 and Superannuation (Excess Concessional Contributions Charge) Bill 2013 have now passed all stages without amendment and effectively await Royal Assent, after having been passed by the Senate on Fri 28.6.2013.
[LTN 123, 28/6/13]