In 2 similar cases, the AAT has upheld the Commissioner’s decision not to exercise his discretion to disregard excess superannuation contributions for a financial year under s 292-465 of the ITAA 1997.
In AAT Case [2013] AATA 110, the taxpayer had made 2 personal superannuation contributions totalling $482,136 in the 2008 income year. The taxpayer commenced 2 income streams from the contributions and did not claim a deduction for any of the amounts in her 2008 tax return. It followed that the entire $482,136 in personal contributions were non-concessional contributions with $32,136 in excess of her non-concessional cap of $450,000. The taxpayer argued that the excess contributions should be disregarded so that she is taxed in a manner consistent with that applicable had a valid s 290-170 notice to deduct been given to her fund and acknowledged.
The AAT upheld the Commissioner’s decision not to exercise his discretion to disregard the excess contributions after ruling that the taxpayer’s situation did not constitute “special circumstances” as it was not “unusual or out of the ordinary”. To the contrary, the AAT said the law applied to the taxpayer’s circumstances precisely how it was meant to. The AAT rejected the taxpayer’s contention that the s 292-465 relief should be available to produce an outcome that would have ensued had the taxpayer complied with the formalities to claim a deduction for $32,136 of the contributions.
The AAT noted that a valid s 290-170 notice cannot be given once an income stream has been commenced and, in any event, the taxpayer was not entitled to a deduction for any part of the contributions.
(AAT Case [2013] AATA 110, AAT, Ref No: 2012/1051, O’Loughlin SM, 28 February 2013.)
Similarly, in AAT Case [2013] AATA 111, the AAT held that the taxpayer’s situation did not constitute “special circumstances” to disregard excess contributions for the year. The taxpayer, a university lecturer, had made personal contributions of $320,000 and id=”mce_marker”70,000 in the 2008 and 2009 years, respectively. The contributions resulted in $40,000 of excess non-concessional contributions for the 2009 year, generating an ECT assessment of id=”mce_marker”8,600. The AAT rejected the taxpayer’s submission that she was a contractor and not an employee. As such, the AAT held that she would not have been entitled to a deduction for her contributions in any event. According to the AAT, the taxpayer was seeking the discretion to be exercised to “relieve her from the burden of taxation liability incurred through ignorance of the applicable rules.” This is not a case where the discretion ought be exercised, the AAT said.
(AAT Case [2013] AATA 111, AAT, Ref No: 2012/1053, O’Loughlin SM, 28 February 2013.)
[LTN 41, 1/3/13]