Issue
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 non-concessional contributions tax more than 21 days but within 90 days after the date of the release authority?
Decision
Yes. The trustee is required to release money under section 292-415 of the ITAA 1997 where the release authority for excess non-concessional contributions tax is given after 21 days but within 90 days of the date of the release authority.
Facts
The member received an excess contributions tax assessment for excess non-concessional contributions from the Commissioner of Taxation.
The Commissioner issued to the member a release authority for excess non-concessional contributions tax.
The member gave the release authority to the trustee of their accumulation superannuation fund 70 days after the date of the release authority.
Reasons for Decision
When a member of a superannuation fund receives an excess contributions tax assessment for excess non-concessional contributions tax, they will also receive a release authority from the Commissioner under section 292-405 of the ITAA 1997.
Subsection 292-410(1) of the ITAA 1997 states that the member may give the release authority to a superannuation provider that holds a superannuation interest (other than a defined benefit interest) within 90 days after the date of the release authority. However, if the release authority is for excess non-concessional contributions tax, subsection 292-410(2) of the ITAA 1997 states that the member must give the release authority to a superannuation provider within 21 days after the date of the release authority.
Section 288-90 in Schedule 1 to the Taxation Administration Act 1953 (TAA 1953) provides for a penalty to be imposed on the member if the member fails to give the release authority for excess non-concessional contributions tax to a superannuation provider that holds an accumulation interest for the member within 21 days after the date of the release authority.
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 that has been given in accordance with section 292-410 of the ITAA 1997. If payment is not made within that time, the superannuation provider is subject to a penalty under subsection 288-95(1) in Schedule 1 to the TAA 1953.
Even though the release authority for excess non-concessional contributions tax has been given to the member's superannuation provider after the 21 days allowed in subsection 292-410(2) of the ITAA 1997, section 292-415 of the ITAA 1997 still applies.
The 21 day time limit imposed in subsection 292-410(2) of the ITAA 1997 is relevant only in determining whether the member is subject to a penalty.
The construction of paragraph 292-415(1)(c) and subsection 292-415(2) of the ITAA 1997 clearly indicate that the release authority is given under subsection 292-410(1) of the ITAA 1997 and not subsection 292-410(2) of the ITAA 1997. Under subsection 292-410(1) the release authority can be given within 90 days after the date of the release authority.
This treatment is also consistent with Item 112 of Part 1 in Schedule 1 to the Superannuation Industry (Supervision) Regulations which is the condition of release that permits the superannuation provider to pay the amount under the release authority. That item 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 '.
The effect of these provisions confirms that the relevant test for a person giving a release authority is found in subsection 292-410(1) of the ITAA 1997. This includes situations where the release authority is for excess non-concessional contributions tax.
As the member provided the release authority to the superannuation provider 70 days after the date of the release authority, the requirement of subsection 292-410(1) of the ITAA 1997 has been met and the superannuation provider is required to release the relevant amount.