Super contributions tax for incomes above $300,000 to be levied on individuals

by Stuart Jones

In a keynote address to The Institute of Chartered Accountants in Australia’s National SMSF Conference in Sydney this morning [Thur 20.9.2012], ATO Assistant Commissioner Superannuation, Stuart Forsyth, said that the proposed increase in the superannuation contributions tax for high income earners is likely to be levied on the individual (rather than at the fund level).

In the 2012-13 Federal Budget, the Government announced that it would double the effective contributions tax from 15% to 30% from 1 July 2012 for concessional contributions made on behalf of individual’s with an adjusted taxable income (ATI) greater than $300,000. Legislation to implement this measure has not yet been released.

Mr Forsyth said any liability for the additional 15% tax on concessional contributions would accrue directly to the individual taxpayer. In this respect, the proposed framework will mirror the excess contributions tax (ECT) regime which raises assessments against the individual taxpayer. According to Mr Forsyth, this approach is more targeted than the alternative option of re-introducing a surcharge-style framework which would collect the additional tax at the fund level. In addition, Mr Forsyth said that any liability would first absorb credits in a taxpayer’s running account balance. The first assessments in respect of the 2012-13 income year are not expected to be issued until January 2014, Mr Forsyth said.

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