An individual taxpayer has been unsuccessful before the AAT in seeking to have excess concessional contributions for the 2014 financial year disregarded or reallocated pursuant to s291-465 of the ITAA 1997.
- The taxpayer was a full-time employee in the Victorian Public Service and also worked a number of part-time, casual jobs with approximately 4 employers.
- He salary sacrificed $100 per week of his full-time earnings into one super fund and salary sacrificed all of his casual earnings with another super fund.
- The taxpayer did not check his super fund balances.
- In June 2015, the taxpayer received a notice of amended assessment for the 2013-14 financial year that included excess concessional contributions of $11,055. The amended assessment detailed the increase of taxable income from $88,075 to $99,130, an excess concessional contributions tax offset of $1,658 and an excess concessional contributions charge of $250.
- The taxpayer had previously received a notice of assessment for 2012-13 financial year detailing excess concessional contributions of $7,656 and excess concessional contributions tax of $2,411.
The taxpayer submitted that he worked additional casual jobs and salary sacrificed his super to provide for his retirement and for his family. He did not have the predictability of knowing what he would earn through his casual jobs which depended on having shifts allocated. The taxpayer submitted the rules were difficult to comprehend and that he had made an inadvertent mistake. Had he been aware he was approaching his concessional super contribution cap, the taxpayer submitted he would have stopped the salary sacrifice arrangements, and that his ultimate tax bill would have been the same, albeit the tax bill would have been met by PAYG deductions over time.
The AAT said: “In a system where there are limits on what can be contributed to a superannuation fund while retaining concessional treatment, to waive compliance in this case would effectively provide [the taxpayer] with an advantage in the form of being allowed to contribute extra to his superannuation funds, and to enjoy the benefit of that without any cost associated with the excess, to the advantage of other taxpayers in the community who observe the limits.”
The AAT said that while the taxpayer’s “motives for working hard and stowing money away for retirement income are admirable, his predicament [did] not amount to a special circumstance”. It added that inadvertent mistakes were not special circumstances and that the “complexities of the system of taxation of retirement income and providing for retirement income are complexities the whole community has to deal with”. Accordingly, the AAT affirmed the Commissioner’s decision.
(Re Azer and FCT [2016] AATA 472, AAT, Ref No: 2015/6874, O’Loughlin SM, 4 July 2016.)