Issue
Will the Commissioner issue a release authority under section 292-405 of the Income Tax Assessment Act 1997 (ITAA 1997) where an assessment of excess contributions tax is amended to reduce the amount of excess contributions tax payable?
Decision
No. The Commissioner will not issue a new release authority under section 292-405 of the ITAA 1997 where an assessment of excess contributions tax is amended to reduce the amount of excess contributions tax payable, as no liability is imposed under the amended assessment.
Facts
The member received an excess contributions tax assessment for excess concessional contributions. The Commissioner issued a release authority to the member to cover the total amount of the member's liability for excess concessional contributions tax.
The Commissioner received an updated Member Contributions Statement from the member's superannuation fund that showed a reduced amount of concessional contributions.
The Commissioner issued an amended excess contributions tax assessment to reduce the member's liability for excess concessional contributions tax.
Reasons for Decision
Under subsection 292-405(1) of the ITAA 1997 the Commissioner must give a release authority to a person where the person is liable for excess concessional contributions tax or excess non-concessional contributions tax under an excess contributions tax assessment. The release authority is to be given to the person as soon as practicable after the Commissioner makes the excess contributions tax assessment.
Subsection 292-405(2) of the ITAA 1997 requires the release authority to state the amount of excess concessional contributions tax or excess non-concessional contributions tax that the person is liable to pay as a result of the assessment.
An excess contributions tax assessment is made under section 292-230 of the ITAA 1997 and must show: • the amount of excess concessional contributions for a financial year or the amount of excess non-concessional contributions for a financial year, and • the amount of excess concessional contributions tax or the amount of excess non-concessional contributions tax a person is liable to pay.
Subdivision 292-F of the ITAA 1997 allows the Commissioner to amend an excess contributions tax assessment for a person. The Commissioner is required under subsection 292-310(2) of the ITAA 1997 to give the person a notice of the amendment as soon as practicable after making the amendment. An amended excess contributions tax assessment is taken to be an excess contributions tax assessment for a person for a financial year under subsection 292-310(1) of the ITAA 1997.
The Commissioner is not required to issue a release authority where an excess contributions tax assessment does not result in the person being liable to pay either excess concessional contributions tax or excess non-concessional contributions tax.
Where an amended assessment reduces the liability for excess contributions tax imposed under the original assessment the amended assessment does not result in the person being liable to pay excess contributions tax.
The liability arose under the original assessment (albeit for a higher amount) and the release authority was issued for the amount of that liability. As no liability has been imposed under the amended assessment no new release authority will be issued.
Amendment History
Date of amendment Part Comment 1 August 2014 Reason for Decision Removed Note. 11 April 2014 Reason for Decision Inserted Note.
Date of amendment | Part | Comment
1 August 2014 | Reason for Decision | Removed Note.
11 April 2014 | Reason for Decision | Inserted Note.