The AAT has affirmed that a taxpayer was liable for excess contributions tax for superannuation contributions made exceeding the non-concessional contributions cap.
The taxpayer made non-concessional contributions totalling $159,016 to 2 super funds for the year ended 30 June 2008. For the relevant year, the taxpayer was over the age of 65. The Commissioner issued a notice of assessment for excess contributions tax totalling $4,192.44 (calculated on the excess contribution of $9,016).
The taxpayer contended that her error was due to the incorrect interpretation of media reports on the $450,000 bring forward rule for non-concessional contributions, which failed to mention that the [bring forward] rule did not apply to individuals over 65 years of age. Therefore, the taxpayer argued that the error was attributable to special circumstances over which the Commissioner could exercise his discretion to disregard or reallocate the funds to a subsequent year.
The AAT said “[i]t has consistently been observed that an innocent mistake or ignorance of the law does not, in itself, constitute special circumstances”. It said in absence of evidence that the Commissioner published incorrect or misleading information, the “choice by the [taxpayer] to rely upon media reports, and not seek professional advice, constituted a decision to proceed at her own risk”. Therefore, the AAT affirmed the Commissioner’s decision and held that the taxpayer was liable to excess contributions tax.
(AAT Case [2012] AATA 123, Re Tran and FCT, AAT, Ref No 2011/4442, Hughes M, 28 February 2012.)
[LTN 41, 1/3]