Superannuation contributions tax - surcharge assessment amended after amended income tax assessment increased member's adjusted taxable income

Can a surcharge assessment be amended under subsection 19(3) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) to take into account an increase in the member's adjusted taxable income (ATI)?

Yes. Subsection 19(3) of the SCTA allows the Commissioner to amend a surcharge assessment if, after the making of an assessment, the member's ATI for the financial year is increased and the increase affects the surcharge payable on the surchargeable contributions.

The member's ATI exceeded the surcharge threshold for the financial year and a surcharge assessment was issued.

The member's income tax assessment for the financial year relating to the surcharge assessment was amended following the disallowance of an income tax deduction .

An amended surcharge assessment subsequently issued because the member's recalculated ATI increased and the increase affected the surcharge payable on the surchargeable contributions.

Sections 7A and 7B of the SCTA sets out the methods for determining a member's ATI for a financial year. The definition of ATI was formerly in section 43 of the SCTA. The member's ATI for the financial is worked out by reference to, among other specific amounts, the member's taxable income for a financial year.

Subparagraph 19(1)(a)(i) and subsection 19(3) of the SCTA allow the Commissioner to amend a surcharge assessment if, after the making of an assessment of surcharge on a member's surchargeable contributions for a financial year, the member's ATI is increased or reduced, and the increase or reduction in ATI affects a person's liability to pay the surcharge.

As the member's taxable income increased because their income tax assessment for the financial year was amended following the disallowance of an income tax deduction, the member's recalculated ATI increased and affected the surcharge payable for the financial year. Accordingly, the member's surcharge assessment for the relevant financial year was amended in accordance with the provisions of subsection 19(3) of the SCTA.