Mistaken belief does not revoke excess super tax bill
The AAT has held that a taxpayer's "mistaken belief" as to the timing of a superannuation contribution did not constitute "special circumstances" under s 292-465 of the ITAA 1997 to justify reallocating her excess concessional contributions to an earlier financial year.
Background
The taxpayer had started salary sacrificing in 2005 to build up her superannuation balance, which was relatively low due to her work patterns being affected by childcare responsibilities over her working life. The taxpayer exceeded her $25,000 concessional contributions cap for 2009–2010 by $3,398 and was issued with an excess contributions tax (ECT) assessment of $1,070.
The taxpayer applied to the Commissioner to exercise his discretion under s 292-465 to reallocate an employer contribution made on 3 July 2009 to the 2008–2009 financial year in order to avoid an "unfair decision". The taxpayer was under the mistaken belief that an employer contribution made before 28 July would be treated as a concessional contribution for June 2009. The taxpayer argued that the timing of the contribution was beyond her control. She also claimed that the superannuation laws could not have been intended to adversely affect women in her situation who have had child caring responsibilities.
The Commissioner refused to exercise his discretion to reallocate the contributions because he considered that the taxpayer had not demonstrated "special circumstances", as required by s 292-465. The Commissioner also considered that the taxpayer's strategy of salary sacrificing her bonus each year was "high risk" because she did not know in advance the amount of the bonus she might receive from her employer as a concessional contribution.
Decision
The AAT upheld the Commissioner's decision not to reallocate the contribution as the taxpayer's "mistaken belief" as to the timing of concessional contributions did not, in its view, constitute "special circumstances". Accordingly, the AAT upheld the ECT assessment.
While the AAT was sympathetic to the taxpayer's frustration that such a small mistake could undermine what she saw as pursuing the object of the legislation, it ruled that such mistakes as to the operation of the law are not "unusual or uncommon" and do not of themselves amount to "special circumstances".
The AAT also said the taxpayer's contention that the legislation discriminated against women in her position did not assist her application because the AAT was entrusted with applying the provisions of the law as it found them. Nevertheless, the AAT noted that there will commonly be times when a person's child caring responsibilities make concessional contributions difficult. In this respect, the AAT acknowledged that the taxpayer had acted responsibly and in accordance with the object of the legislation by making regular superannuation contributions once her child caring responsibilities (and financial capacity) allowed for it.
Re Applicant 1659 of 2012 and FCT [2012] AATA 754, www.austlii.edu.au/au/cases/cth/AATA/2012/754.html
