ATO - Excess Contributions Tax

The ATO is writing to individual clients (via their postal address, so usually care of their accountant) about the possibility of issuing an assessment for excess contributions tax.

There are two possible areas where tax MAY be payable – concessional contributions and non-concessional contributions. These are more commonly referred to as tax deductible and undeducted contributions respectively.

Concessional contributions come in two forms, from employers and from members. If they are from an employer, we will disclose them as such on the Member Contribution Statement that is lodged with the super fund tax return. If this type of contribution is from a member, then disclosure is quite different. We are required to disclose member contributions as one combined amount, being the total of both concessional and nonconcessional contributions.

In order for the ATO to work out the amount of any member-sourced concessional contributions, they look at the member’s personal tax return. In that return, there is a label within the deductions area, number D12, Personal Superannuation Contributions. The ATO looks at the total contributions we disclose, deduct the amount at D12 in the personal tax return and arrive at the non-concessional contributions.

When looking at the ATO letter, the key to taking action to avoid any assessment for excess contributions tax is determining where any problem lies. If the employer concessional amount is incorrect, contact us for any changes. Likewise, if the non-concessional amount is incorrect, contact us to arrange any necessary changes. If the member deductible amount is the problem, then the member’s accountant will have to resolve the issue.

Please note that Supercorp cannot contact the ATO about these ATO letters. Only the client or their accountant can speak to the ATO.

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