Issue
Is a contribution to a superannuation fund exempt from tax under section 282B of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
No. The contribution is not exempt from tax under section 282B of the ITAA 1936.
Facts
A Self Managed Superannuation Fund (SMSF) received a roll-over from an untaxed superannuation fund.
The SMSF is a complying superannuation fund.
The rollover included a post-June 1983 untaxed element.
The fund is paying a pension and claiming exempt pension income.
Reasons for Decision
Section 282B of the ITAA 1936 provides that normal assessable income of a complying superannuation fund derived from assets that are segregated current pension assets will be exempt from tax.
Normal assessable income is defined in subsection 267(1) of the ITAA 1936 as assessable income other than: a) special income; or b) taxable contributions.
Section 274 of the ITAA 1936 provides that the definition of a taxable contribution includes a specified roll-over amount.
A specified rollover amount is also defined in subsection 267(1) of the ITAA 1936 as: in relation to an eligible entity...a roll-over of some or all of the untaxed element of the post-June 83 component of an eligible termination payment.
An eligible entity is defined in subsection 267(1) of the ITAA 1936 as: a fund that is an eligible ADF (Approved Deposit Fund) in relation to the year of income a fund that is an eligible superannuation fund in relation to the year of income a unit trust that is a PST (Pooled Superannuation Trust) in relation to the year of income
Subsection 267(1) of the ITAA 1936, further defines an eligible superannuation fund as a fund that is a complying superannuation fund.
The amount rolled over into the SMSF satisfies the definition of a specified roll-over amount. A specified roll-over amount is a taxable contribution. As a result it is excluded from the definition of normal assessable income and is not exempt from tax under section 282B of the ITAA 1936.