The AAT has affirmed that a taxpayer was liable for excess contributions tax in relation to the 2010 income year for contributions made exceeding the concessional contributions cap.
For the 2010 income year, contributions totalling $52,659.98 was made into the taxpayer’s super fund by his employer, as a part of a salary sacrifice arrangement. For the relevant year, the taxpayer’s concessional contributions cap was $50,000. In April 2011, the Commissioner issued a letter to the taxpayer indicating that he had exceeded his concessional contributions cap by $2,659.98. Further, the letter stated the tax payable by the taxpayer would be 31.5% of $2,659.98. The taxpayer objected and broadly argued the assessment was misleading as he was not informed that the tax payable of 31.5% would be in addition to the 15% he already paid.
The Tribunal rejected the taxpayer’s argument and found the letter had not been misleading. It said the letter clearly stated that any contributions over the cap amount are subject to extra tax. Further, the Tribunal said the taxpayer’s claim that he had already paid 15% on contributions is not correct, as the tax was paid by the super fund and not the taxpayer. In conclusion, the AAT held that the assessment was correct, the excess concessional contributions were accurately quantified, and the correct tax rate of 31.5% was imposed.
(AAT Case [2012] AATA 33, Re Strasser and FCT, AAT Sitting as the Small Taxation Claims Tribunal, Ref No 2011/4354, Frost SM, 20 January 2012.)
[LTN 32, 17/2]