Blog Layout

Reallocation of excess concessional contributions denied
Liz Gibbs • Aug 02, 2023

Reallocation of excess concessional contributions denied

The Administrative Appeals Tribunal (‘AAT’) has held that there were no special circumstances in relation to a taxpayer who made excess concessional contributions in a financial year, such that the ATO could allocate some of those contributions to the previous financial year.


On Wednesday, 26 June 2019, the taxpayer arranged for contributions totalling just under $25,000 to be made to his superannuation fund, via a direct debit from his bank account to a clearing house used by his fund. 


However, the relevant contribution was received by the superannuation fund on Monday 1 July 2019. The taxpayer then made further contributions totalling just under $25,000 to his superannuation fund on 5 August 2019, which meant that he had made excess concessional contributions for the 2020 financial year.


The AAT confirmed the ATO’s decision that the circumstances did not justify some or all of the contributions made by the taxpayer on 26 June 2019 being reallocated to the 2019 financial year. That is, there were no ‘special circumstances’ (as required by the relevant legislation) that would justify the exercise of the ATO’s discretion to allocate the contributions to the previous financial year. 


While the AAT accepted that the taxpayer genuinely intended that his contribution would be received by his superannuation fund by 30 June 2019, he should not have waited until 26 June 2019 to make the contribution, as “there was nothing unusual about the time taken to process the ... payment made on 26 June 2019.”


Also, in relation to various events and actions of other parties that the taxpayer submitted constituted ‘special circumstances’, the AAT noted that “an error on the part of a third party will not on its own amount to special circumstances.” 


IMPORTANT: This communication is factual only and does not constitute financial advice. Please consult a licensed financial planner for advice tailored to your financial circumstances.  Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please email us at RGA Business and Tax Accountants at reception@rgaaccounting.com.au . All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.


Transfer business to your kids
By Liz Gibbs 08 May, 2024
Generational succession - handing your business across to your kids or family - sounds simple enough but, many families end up in a dispute right at the point when the parents, business, and children are most vulnerable.
The ‘bank of Mum & Dad’
By Liz Gibbs 06 May, 2024
The great wealth transfer from the baby boomer generation has begun and home ownership is the catalyst.
Division 7A crack down
By Liz Gibbs 06 May, 2024
The ATO is cracking down on business owners who take money or use company resources for themselves.
Excess Concessional Contributions
By Liz Gibbs 04 May, 2024
The Administrative Appeals Tribunal ('AAT') recently held that a taxpayer was liable to pay excess concessional contributions tax in relation to contributions made on his behalf by his employer.
False invoicing
By Liz Gibbs 03 May, 2024
The Serious Financial Crime Taskforce ('SFCT') is warning businesses about using illegal financial arrangements such as 'false invoicing' to cheat the tax and super systems. False invoicing arrangements may consist of the following:
illegal access to super
By Liz Gibbs 02 May, 2024
Faced with tough times, some people may be thinking about accessing their super early.
Disaster
By Liz Gibbs 01 May, 2024
Taxpayers should be aware that some natural disaster relief payments are not taxable.
Scam
By Liz Gibbs 01 May, 2024
The Government has urged Australians to be vigilant regarding scammers who target ATO log-in details to commit tax fraud.
ABN up to date
By Liz Gibbs 29 Apr, 2024
When did you last check your Australian Business Number (ABN) details on the Australian Business Register (ABR)? If you’re not sure
By Liz Gibbs 28 Apr, 2024
Reminder of March 2024 Quarter Superannuation Guarantee (‘SG’) 
More Posts
Share by: