Superannuation Contributions Tax: allocation of surplus in the financial year ended 30 June 1997

Is a surplus allocation made to an accumulation benefits only member within a defined benefits superannuation scheme a 'surchargeable contribution' in the financial year ended 30 June 1997 under the provisions of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA)?

No. A surplus allocation made to an accumulation benefits only member within a defined benefits superannuation scheme is not a surchargeable contribution in the financial year ended 30 June 1997 under any provision of the SCTA.

The superannuation provider is a defined benefits superannuation scheme that contains some members who are only entitled to an accumulation benefit and have no present or future entitlement to a defined benefit contingency.

An accumulation-benefits-only member of the superannuation provider had an allocation from surplus credited to their account in the financial year ended 30 June 1997.

Paragraph 3.6.1 of the Attachment to Superannuation Contributions Ruling SCR 97/1 provides that: 'members of defined benefits superannuation schemes for whom there are separately defined and allocated contributions and who are entitled to receive an accumulation benefit only should be treated consistently with members of accumulation schemes.'

Subsection 8(2) of the SCTA discusses surchargeable contributions for members of accumulated benefits schemes. The paragraph relevant to allocated surplus is paragraph 8(2)(d), which refers to subparagraphs (a)(ii) and (a)(iii) of the definition of 'contributed amounts' in section 43 of the SCTA.

Subparagraph (a)(ii) of the definition of 'contributed amounts' in section 43 of the SCTA applies where there are regulations in force in respect of the financial year. The relevant regulations are regulations 2G and 2H of the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997, both of which deal with surplus allocations. However, as neither of these regulations apply to the financial year ended 30 June 1997, subparagraph (a)(ii) of the definition of 'contributed amounts' does not apply to the relevant facts of the case.

Subparagraph (a)(iii) of the definition of 'contributed amounts' in section 43 of the SCTA applies where there are no relevant regulations in force under subparagraph (a)(ii), and the financial year is later than the year ended 30 June 1997. Consequently, subparagraph (a)(iii) of the defintion of 'contributed amounts' does not apply to the relevant facts of the case.

In summary, there is no provision which treats an allocated surplus amount as a 'surchargeable contribution' in the year ended 30 June 1997.