The Federal Court has upheld a superannuation excess contributions tax assessment and affirmed the Commissioner’s decision that there were no “special circumstances” under s 292-465 of the ITAA 1997 to warrant reallocating excess concessional contribution received late via BPay.

  • The taxpayer is the managing director of a fluid technology company.
  • On 30 June 2009, the bookkeeper for the company made electronic payments via BPay to the taxpayer’s AMP superannuation account.
  • One of the payments was a salary sacrifice payment of $30,000 and the other was an employer contribution of $8,999.
  • The 2 payments were received by AMP on 1 July 2009 and applied to the taxpayer’s account.
  • The bookkeeper also mistakenly made another salary sacrifice payment of id=”mce_marker”3,970.66 to the taxpayer’s AMP account on 27 May 2010, which was actually intended for the 2010-11 year.

In 2011, the Commissioner issued an assessment for excess concessional contributions tax (ECT) of id=”mce_marker”6,905.20 in respect of excess concessional contributions of $53,667.42 for the 2009-10 year.

The Court upheld the Commissioner’s decision that there were no “special circumstances” under s 292-465 to exercise his discretion to reallocate the excess concessional contributions to another financial year. The Court ruled that the BPay transfers initiated on 30 June but not received until 1 July did not amount to a “special circumstance” as they were not “unusual or different outside the ordinary course of events”. Likewise, the Court said the error made by the bookkeeper in making the contribution early on 27 May 2010 was not a special circumstance.

In this respect, the Court noted the Commissioner’s submission that “simple errors” or an “innocent mistake” of this nature do not in themselves constitute special circumstances. Equally, the Court said the taxpayer was in a position to ensure that contributions were made by the bookkeeper in the correct financial year.

(Liwszyc v FCT [2014] FCA 112, Federal Court, McKerracher J, 20 February 2014.)

[LTN 37, 25/2/14]