Excess Superannuation Contributions: Superannuation Law Changes on the Way

A Bill is currently before Parliament which proposes to amend the tax law to allow the Commissioner of Taxation to exercise a discretion to disregard or allocate to another financial year all or part of a person's contributions for the purposes of excess contributions tax before an assessment is issued. Currently, investors have to wait until after the excess contributions tax assessment has been issued. 

 TIP: It should be noted, however, that there is no proposed change to the criteria used by the Commissioner to determine whether the determination should be made, that is, the Commissioner must still be satisfied that ‘special circumstances’ exist. 

TIP: In a recent case, the Administrative Appeals Tribunal decided it could only review the Commissioner's refusal to exercise his discretion to reallocate superannuation contributions if the discretion could be applied before an excess contributions tax assessment was issued. While the proposed amendments (if enacted) will not reverse the Tribunal's decision, they could potentially ensure the refusal to exercise the discretion would be a reviewable decision in the future.