The AAT has confirmed that a taxpayer was liable to pay the additional 15% tax under Div 293 of the ITAA 1997.

Div 293 imposes an extra 15% tax (a total of 30%), on a contributor, in respect of concessional (deductible) superannuation contributions made for the benefit of that individual, if their annual income is above the “high income threshold” of $300,000.

In the 2013-14 income year the taxpayer received a lump sum payment of $342,114 for arrears in his income over the previous 4 years. If treated as received in each of those 4 years, the taxpayer did not have over $300,000 of income (under the relevant definition) in any of those 4 years. He submitted that this was how the lump sum should be treated.

However, the AAT dismissed the taxpayer’s argument on the basis that income from employment is derived when the income is actually received, irrespective of the period for which the payment occurs. In particular, it stated that arrears of salary paid are assessable income in the year of receipt even though they relate to a past or future income year.

(Re DHDF and FCT [2016] AATA 778, AAT, File No 2015/6460, Deutsch DP, 4 October 2016.)

[FJM] [LTN 217, 9/11/16]