Release authority: excess concessional contributions tax

Is the trustee of a superannuation fund required to release money under section 292-415 of the Income Tax Assessment Act 1997 (ITAA 1997) where the trustee has been given a release authority for excess concessional contributions tax more than 90 days after the date of the release authority?

No. The trustee is not required to release money under section 292-415 of the ITAA 1997 where the 90 day period has elapsed. Furthermore, unless a condition of release has been met, the trustee is not permitted to release money.

The member received an excess contributions tax assessment for the excess concessional contributions from the Commissioner of Taxation.

The Commissioner issued to the member a release authority for excess concessional contributions tax.

The member gave the release authority to the trustee of their accumulation superannuation fund after a period of 90 days from the date of the release authority.

When a member of a superannuation fund receives an excess contributions tax assessment for excess concessional contributions tax, they will also receive a release authority from the Commissioner under section 292-405 of the ITAA 1997. In accordance with section 292-410 of the ITAA 1997, the member may, within 90 days after the date of the release authority, give the release authority to a superannuation provider that holds an accumulation interest for the member.

Where the member gives the release authority to the superannuation provider, section 292-415 of the ITAA 1997 requires the provider to pay to the member (or to the Commissioner, where appropriate) the relevant amount within 30 days after receiving the release authority. If payment is not made within that time, the provider is subject to a penalty under subsection 288-95(1) of Schedule 1 to the Taxation Administration Act 1953.

However, where the member gives the release authority to the trustee more than 90 days after the date of the release authority, the member has not given the release authority in accordance with section 292-410 of the ITAA 1997. Therefore section 292-415 of the ITAA 1997 does not apply and the trustee is not required to release money.

This decision is consistent with the discussion in paragraph 1.132 of the Explanatory Memorandum to the Tax Laws Amendment (Simplified Superannuation) Bill 2006: A release authority for excess concessional contributions will expire after 90 days. The time limit on providing release authorities for excess concessional contributions tax is necessary to maintain the integrity of the superannuation preservation rules.

Item 112 of Part 1 in Schedule 1 to the Superannuation Industry (Supervision) Regulations 1994 prescribes that a condition of release is met where 'a person gives a release authority to a superannuation provider under subsection 292-410(1) of the Income Tax Assessment Act 1997 '. In the case at hand, the member did not give the release authority in accordance with that subsection because the release authority was given after 90 days after the date of the release authority. Consequently, unless another condition of release is satisfied, the trustee is not permitted to release money.