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 increase the amount of excess contributions tax payable?
Decision
Yes. The Commissioner will issue a release authority under section 292-405 of the ITAA 1997 where an assessment of excess contributions tax is amended to increase the amount of excess contributions tax payable, as an additional liability is imposed under the amended assessment. The release authority will be issued for the additional amount of excess contributions tax payable.
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 an increased amount of concessional contributions.
The Commissioner issued an amended excess contributions tax assessment to increase 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 required to issue a release authority where an excess contributions tax assessment results in the person being liable to pay either excess concessional contributions tax or excess non-concessional contributions tax.
Where an amended assessment increases the liability for excess contributions tax imposed under the original assessment the amended assessment also results in the person being liable to pay excess contributions tax.
An initial liability arose under the original assessment and a release authority was issued for the amount of that liability. As an additional liability for excess contributions tax has been imposed under the amended assessment a new release authority is issued for the amount of the additional liability.
Amendment History
Date of amendment Part Comment 1 August 2014 Reason for Decision Removed Note. 2 May 2014 Reason for Decision Division 292 ITAA 1997 has been substituted with provisions applying to excess non-concessional contributions tax only by the Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Act 2013 with effect from 29 June 2013. For application, transitional and saving provisions see note under Div 291 of the ITAA 1997. The effect of these saving provisions is to ensure the continuing application of the excess concessional contributions tax system for the 2012-13 and prior financial years
Date of amendment | Part | Comment
1 August 2014 | Reason for Decision | Removed Note.
2 May 2014 | Reason for Decision | Division 292 ITAA 1997 has been substituted with provisions applying to excess non-concessional contributions tax only by the Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Act 2013 with effect from 29 June 2013. For application, transitional and saving provisions see note under Div 291 of the ITAA 1997. The effect of these saving provisions is to ensure the continuing application of the excess concessional contributions tax system for the 2012-13 and prior financial years