The AAT has affirmed the Commissioner’s decision to impose an excess contributions tax assessment and deny a taxpayer’s request for excess contributions amounts to be reallocated to a previous financial year pursuant to s 292-465 of the ITAA 1997.
On 30 June 2007, the taxpayer attempted to transfer $60,000 from a family discretionary trust into his self-managed super fund (SMSF). The transfer was a concessional contribution and the taxpayer intended that $40,000 be allocated to himself and $20,000 to his spouse. However, because 30 June 2007 was a Saturday, the amount was not credited via his bank to the super fund until 2 July 2007. The excess concessional contributions for the 2008 financial year amounted to almost $54,000 and the Commissioner imposed excess contributions tax of around $17,000. The taxpayer requested that the $40,000 amount be reallocated to the previous year pursuant to s 292-465.
The taxpayer submitted that it was reasonable for him to have expected that the transfer of funds would have been instantaneous. He contended the transaction had been recognised by the bank as having been effected on 30 June 2007, even if the withdrawal and deposit of funds had not taken place until 2 July 2007 (as shown in bank records). Further, it was argued that had the transfer been on a business day, it would have been effective virtually instantaneously.
Although the Tribunal said the taxpayer appeared “to have acted with good intentions at all times”, it found the circumstances did not enliven the discretion under s 292-465. It held the funds were not credited to the super fund’s account until 2 July 2007. Moreover, the Tribunal was of the view that “special circumstances” did not exist in this instance.
(AAT Case [2012] AATA 179, Re Chantrell and FCT, AAT, Ref No: 2011/4100, Hughes M, 23 March 2012.)
[LTN 59, 27/3]
[FJM Note: Is there nothing that is a special circumstance? This run of adverse AAT cases is a worry.]