Issue
Has the superannuation contributions surcharge assessment for the year correctly issued to the member, after they became the holder of the surchargeable contributions?
Decision
Yes. After the member became the holder of the surchargeable contributions, they are liable for the superannuation contributions surcharge. Under section 10 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) the surcharge liability rests with holder of the surchargeable contributions.
Facts
The superannuation provider, which was a superannuation (accumulation benefits) provider, reported surchargeable contributions (employer contributions) received for the member in the financial year.
The Commissioner issued a surcharge assessment to the superannuation provider in respect of the reported surchargeable contributions for the member.
The superannuation provider advised the Commissioner that they no longer held the surchargeable contributions. They advised that a portion of the surchargeable contributions previously reported for the member had been paid to the member as an eligible termination payment (ETP). The remainder of the surchargeable contributions had been rolled over to another superannuation provider.
The Commissioner cancelled the surcharge assessment issued to the superannuation provider and removed the provider's liability to surcharge on the contributions it previously reported for the financial year.
The Commissioner issued a superannuation contributions surcharge assessment to the member in respect of the surchargeable contributions which were included in the ETP paid to the member.
Reasons for Decision
Section 13 of the SCTA requires the superannuation provider to report to the Commissioner details of a member's total contributed amounts for each financial year including the member's surchargeable contributions. In addition, the superannuation provider is also required to report details of that part of the total contributed amounts transferred by the provider to the member or to another provider.
Under subsection 10(4) of the SCTA, where the contributions are paid to the member as an ETP, the member is liable to pay the surcharge.
The Commissioner issued a superannuation contributions surcharge assessment (the notice of assessment) to the superannuation provider for the financial year in respect of the member's surchargeable contributions reported by the provider. However, prior to the receipt of the notice of assessment, the provider made two payments, which included the surchargeable contributions. One payment of the surchargeable contributions was rolled-over to another superannuation provider and the other was made to the member.
In respect of the payment made to the member by the superannuation provider, the Commissioner issued a superannuation contributions surcharge assessment to the member. The assessment recognised that the member was the holder of the surchargeable contributions and was liable to pay the surcharge.