Commonwealth: Tax Laws Amendment (Simplified Superannuation) Act 2007 (Cth)

Tax Laws Amendment (Simplified Superannuation) Act 2007 No. 9, 2007 An Act to amend the law relating to taxation, superannuation, social security and veterans' entitlements, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Main superannuation amendments Part 1—Main amendments Income Tax Assessment Act 1997 Part 2—Main consequential amendments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Income Tax Rates Act 1986 Taxation Administration Act 1953 Part 3—Main transitional amendments Income Tax (Transitional Provisions) Act 1997 Part 4—TFN consequentials for Division 295 Income Tax Assessment Act 1936 Superannuation Industry (Supervision) Act 1993 Taxation (Interest on Overpayments and Early Payments) Act 1983 Schedule 2—Employment termination payments Part 1—Main amendments Income Tax Assessment Act 1997 Part 2—Main transitional and consequential amendments Income Tax (Transitional Provisions) Act 1997 Taxation Administration Act 1953 Schedule 3—Indexation Income Tax Assessment Act 1997 Schedule 4—Reporting Superannuation (Government Co‑contribution for Low Income Earners) Act 2003 Superannuation Guarantee (Administration) Act 1992 Superannuation (Resolution of Complaints) Act 1993 Taxation Administration Act 1953 Schedule 5—Self‑managed superannuation funds Fringe Benefits Tax Assessment Act 1986 Income Tax Assessment Act 1997 Superannuation Industry (Supervision) Act 1993 Superannuation (Self Managed Superannuation Funds) Taxation Act 1987 Taxation Administration Act 1953 Schedule 6—Government Co‑contribution for Low Income Earners Superannuation (Government Co‑contribution for Low Income Earners) Act 2003 Schedule 7—Portability and unclaimed money Retirement Savings Accounts Act 1997 Superannuation (Unclaimed Money and Lost Members) Act 1999 Schedule 8—Social Security Act 1991 Part 1—Amendments commencing 20 September 2007 Part 2—Amendment commencing 1 July 2007 Schedule 9—Veterans' Entitlements Act 1986 Part 1—Amendments commencing 20 September 2007 Part 2—Amendment commencing 1 July 2007 Schedule 10—Definitions and related amendments Income Tax Assessment Act 1997 Tax Laws Amendment (Simplified Superannuation) Act 2007 No. 9, 2007 An Act to amend the law relating to taxation, superannuation, social security and veterans' entitlements, and for related purposes [Assented to 15 March 2007] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Tax Laws Amendment (Simplified Superannuation) Act 2007. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 15 March 2007 2. Schedules 1 to 3 The day on which this Act receives the Royal Assent. 15 March 2007 3. Schedule 4, items 1 to 13 The day on which this Act receives the Royal Assent. 15 March 2007 4. Schedule 4, item 14 The later of: 15 March 2007 (a) at the same time as the provision(s) covered by table item 3; and (paragraph (a) applies) (b) immediately after the commencement of items 20 and 21 in Schedule 2 to the Tax Laws Amendment (2006 Measures No. 6) Act 2007. However, the provision(s) do not commence at all if the event mentioned in paragraph (b) does not occur. 5. Schedule 4, items 15 and 16 The day on which this Act receives the Royal Assent. 15 March 2007 6. Schedule 5, items 1 to 34 The day on which this Act receives the Royal Assent. 15 March 2007 7. Schedule 5, item 35 Immediately after the provisions covered by table item 2. 15 March 2007 8. Schedule 5, item 36 The day on which this Act receives the Royal Assent. 15 March 2007 9. Schedules 6 and 7 The day on which this Act receives the Royal Assent. 15 March 2007 10. Schedule 8, Part 1 20 September 2007. 20 September 2007 11. Schedule 8, Part 2 1 July 2007. 1 July 2007 12. Schedule 9, Part 1 20 September 2007. 20 September 2007 13. Schedule 9, Part 2 1 July 2007. 1 July 2007 14. Schedule 10 The day on which this Act receives the Royal Assent. 15 March 2007 Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Main superannuation amendments Part 1—Main amendments Income Tax Assessment Act 1997 1 After Part 3‑10 Insert: Part 3‑30—Superannuation Division 280—Guide to the superannuation provisions Table of sections 280‑1 Effect of this Division 280‑5 Overview Contributions phase 280‑10 Contributions phase—deductibility 280‑15 Contributions phase—limits on superannuation tax concessions Investment phase 280‑20 Investment phase Benefits phase 280‑25 Benefits phase—different types of superannuation benefit 280‑30 Benefits phase—taxation varies with age of recipient and type of benefit 280‑35 Benefits phase—roll‑overs The regulatory scheme outside this Act 280‑40 Other relevant legislative schemes 280‑1 Effect of this Division (1) This Division is a *Guide. (2) Tax concessions in this Part are intended to encourage Australians to save in order to make provision for their retirement, recognising that superannuation investments, and the income from them, are quarantined for retirement. 280‑5 Overview (1) There are 3 phases in the tax treatment of superannuation, as follows: (a) the contributions phase; (b) the investment phase; (c) the benefits phase. (2) In the contributions phase, contributions are made to a superannuation plan in respect of a member of the plan. (3) In the investment phase, these contributions are invested by the superannuation provider. (4) In the benefits phase, these contributions, plus earnings from investing them, are usually paid as benefits to the member when he or she retires after reaching preservation age. In the event of death, the benefits are usually paid to the member's dependants. (5) There is also a regulatory scheme outside this Act that is relevant to the taxation treatment of superannuation. For example, other Acts set out prudential and operating standards for superannuation providers. Contributions phase 280‑10 Contributions phase—deductibility Contributions that can be deducted (1) Employers can usually deduct contributions they make in respect of their employees. Individuals can usually deduct contributions they make in respect of themselves if less than 10% of their total assessable income (plus reportable fringe benefits) for the income year is attributable to employment or similar activities. Other contributions cannot be deducted (2) Other contributions cannot be deducted. These include personal contributions made by individuals whose employment income is 10% or more of their total income, and contributions made by others in respect of them (such as contributions by a spouse or family member, or Government co‑contributions). 280‑15 Contributions phase—limits on superannuation tax concessions (1) There is a limit to contributions that can be made in respect of an individual in a year that receive favourable tax treatment. This limit takes the form of a tax on excessive contributions, and neutralises the favourable tax treatment arising from the excessive contributions. (2) If concessional contributions exceed an indexed cap, the individual concerned is taxed on the excess. This tax liability can be met by releasing money from his or her superannuation interests. (3) If non‑concessional contributions (including any excess for the purposes of the first cap) exceed a second indexed cap, the individual is taxed on the excess. The second cap is equivalent to three times the first cap. The payment of this tax liability must be accompanied by releasing money equivalent to the liability from his or her superannuation interests. Investment phase 280‑20 Investment phase (1) Contributions that can be deducted are assessable income of the superannuation provider. Contributions that cannot be deducted are not assessable income of the superannuation provider. (There are some exceptions.) (2) Earnings on the investment of amounts in a superannuation plan are assessable income of the superannuation provider. (3) The superannuation provider's taxable income is generally taxed at the concessional rate of 15%. (4) However, superannuation providers pay no tax on earnings from the assets that support the payment of benefits in the form of income streams, once the income streams have commenced. Benefits phase 280‑25 Benefits phase—different types of superannuation benefit Superannuation benefits can be drawn down as lump sums, income streams (such as pensions or annuities), or combinations of both. Different tax treatment may apply depending on whether a lump sum or income stream is paid. 280‑30 Benefits phase—taxation varies with age of recipient and type of benefit (1) The taxation of superannuation benefits depends primarily on the age of the member. (2) If the member is aged 60 or over, superannuation benefits (both lump sums and income streams) are tax free if the benefits have already been subject to tax in the fund (that is, where the benefits comprise a taxed element). This covers the great majority of superannuation members. (3) Where a superannuation benefit contains an amount that has not been subject to tax in the fund (an untaxed element), this element is subject to tax for those aged 60 or over, though at concessional rates. This is relevant generally to those people (for example, public servants), who are members of a superannuation fund established by the Australian Government or a state government. (4) If the member is less than 60, superannuation benefits may receive concessional taxation treatment, though the treatment is less concessional than for those aged 60 and over. (5) Superannuation benefits may also include a "tax free component"; this component of the benefit is always paid tax free. (6) Additional tax concessions may apply when superannuation benefits are paid after a member's death. 280‑35 Benefits phase—roll‑overs A member can "roll over" their superannuation benefits from one complying superannuation plan to another, or between different interests in the same plan. This is usually done to keep the benefits invested in the superannuation system, or to convert a lump sum to a superannuation income stream. No tax is generally payable until the benefits are finally drawn down. The regulatory scheme outside this Act 280‑40 Other relevant legislative schemes (1) The Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 regulate the prudential and operating standards for superannuation providers. Concessional tax treatment is generally available only if providers comply with these standards. (2) Other legislative schemes relevant to superannuation include the following: (a) the Superannuation Guarantee (Administration) Act 1992, which requires that employers provide a minimum level of superannuation contributions for each of their eligible employees; (b) the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003, which provides for Government co‑contributions to low income earners' superannuation; (c) the Small Superannuation Accounts Act 1995, which provides a facility to accept payments of superannuation guarantee shortfalls; (d) the Superannuation (Unclaimed Money and Lost Members) Act 1999, which provides for the payment of unclaimed superannuation money, and the maintenance of a register of lost members. Division 290—Contributions to superannuation funds Table of Subdivisions Guide to Division 290 290‑A General rules 290‑B Deduction of employer contributions and other employment‑connected contributions 290‑C Deducting personal contributions 290‑D Tax offsets for spouse contributions Guide to Division 290 290‑1 What this Division is about This Division sets out the rules for deductions and tax offsets for superannuation contributions. Subdivision 290‑A—General rules Table of sections 290‑5 Non‑application to roll‑over superannuation benefits etc. 290‑10 No deductions other than under this Division 290‑5 Non‑application to roll‑over superannuation benefits etc. This Division does not apply to a contribution that is any of the following: (a) a *roll‑over superannuation benefit; (b) a *superannuation lump sum that is paid from a *foreign superannuation fund. 290‑10 No deductions other than under this Division (1) You cannot deduct under this Act an amount you pay as a contribution to a *complying superannuation fund or *RSA, except as provided by this Division. (2) You cannot deduct under this Act an amount you pay as a contribution to a *non‑complying superannuation fund, except as provided by this Division. Note: Under Subdivision 290‑B (Deduction of employer contributions and other employment‑connected contributions), you may be able to deduct contributions you make to a non‑complying fund that you believe to be a complying fund. Subdivision 290‑B—Deduction of employer contributions and other employment‑connected contributions Table of sections Deducting employer contributions 290‑60 Employer contributions deductible 290‑65 Application to employees etc. Conditions for deducting an employer contribution 290‑70 Assessable income or business conditions 290‑75 Complying fund conditions 290‑80 Age related conditions Other employment‑connected deductions 290‑85 Contributions for former employees etc. 290‑90 Controlling interest deductions 290‑95 Amounts offset against superannuation guarantee charge Returned contributions 290‑100 Returned contributions assessable Deducting employer contributions 290‑60 Employer contributions deductible (1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for another person who is your employee when the contribution is made (regardless whether the benefits are payable to a *SIS dependant of the employee if the employee dies before or after becoming entitled to receive the benefits). Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see sections 85‑25 and 86‑75 of this Act and subsection 73B(14) of the Income Tax Assessment Act 1936. (2) However, the conditions in sections 290‑70, 290‑75 and 290‑80 must also be satisfied for you to deduct the contribution. (3) You can deduct the contribution only for the income year in which you made the contribution. (4) You cannot deduct the contribution if it is an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a regulated superannuation fund (within the meaning of that Act), or to an *RSA, to be held for the benefit of your *non‑member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned. 290‑65 Application to employees etc. (1) At a time when an individual is an employee of an entity within the expanded meaning of employee given by section 12 of the Superannuation Guarantee (Administration) Act 1992, this Subdivision applies as if the individual were an employee of the entity. (2) For the purposes of this Subdivision: (a) in relation to a contribution by a partnership in respect of an employee of the partnership—treat the employee as an employee of the partnership; and (b) in relation to a contribution by a partner in a partnership in respect of an employee of the partnership—treat the employee as an employee of the partner. Conditions for deducting an employer contribution 290‑70 Assessable income or business conditions To deduct the contribution, the employee must be: (a) engaged in producing your assessable income; or (b) an Australian resident who is engaged in your business. 290‑75 Complying fund conditions (1) If the contribution was made to a *superannuation fund, at least one of these conditions must be satisfied: (a) the fund was a *complying superannuation fund for the income year of the fund in which you made the contribution; (b) at the time you made the contribution, you had reasonable grounds to believe that the fund was a complying superannuation fund for that income year; (c) at or before the time you made the contribution, you obtained a written statement (given by or on behalf of the trustee of the fund) that the fund: (i) was a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); and (ii) was not subject to a direction under section 63 of that Act (which prevents a fund from accepting employer contributions). (2) However, the condition in paragraph (1)(b) or (c) cannot be satisfied if, when the contribution was made: (a) you were: (i) the trustee or the manager of the fund; or (ii) an *associate of the trustee or the manager of the fund; and (b) you had reasonable grounds to believe that: (i) the fund was not a resident regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or (ii) the fund was operating in contravention of a regulatory provision (within the meaning of section 38A of that Act). (3) For the purposes of subparagraph (2)(b)(ii), a contravention of the Superannuation Industry (Supervision) Act 1993 or regulations made under it is to be ignored unless the contravention is: (a) an offence; or (b) a contravention of a civil penalty provision of that Act or those regulations. (4) For the purposes of subparagraph (2)(b)(ii), it is sufficient if a contravention is established on the balance of probabilities. 290‑80 Age related conditions (1) To deduct the contribution, either: (a) you must have made the contribution on or before the day that is 28 days after the end of the month in which the employee turns 75; or (b) you must have been required to make the contribution by an industrial award, determination or notional agreement preserving State awards (within the meaning given by Schedule 8 to the Workplace Relations Act 1996) that is in force under an *Australian law. (2) If only paragraph (1)(b) applies, you can deduct only the amount of the contribution that is required by the industrial award, determination or notional agreement preserving State awards. Note: An industrial agreement, such as an Australian Workplace Agreement, Collective Agreement or preserved State agreement under the Workplace Relations Act 1996, or a similar agreement made under a State law, is not an award or determination. Other employment‑connected deductions 290‑85 Contributions for former employees etc. (1) Section 290‑60 applies as modified by this section if a contribution you make in respect of another person: (a) reduces your charge percentage under sections 22 or 23 of the Superannuation Guarantee (Administration) Act 1992 in respect of the other person because of section 15B of that Act; or (b) is a one‑off payment in lieu of salary or wages that relate to a period of service during which the other person was your employee. (2) Treat the other person as your employee for the purposes of subsection 290‑60(1). (3) Despite subsection 290‑60(2), the condition in section 290‑70 must be satisfied only at the most recent time when the other person was your employee (apart from subsection (2) of this section). 290‑90 Controlling interest deductions (1) Section 290‑60 applies as modified by this section if you make a contribution in respect of another person at a time, and at that time: (a) the other person is an employee of a company in which you have a controlling interest; or (b) you are connected to the other person in the circumstances set out in subsection (5); or (c) you are a company connected to the other person in the circumstances described in subsection (6). (2) Treat the other person as your employee at that time for the purposes of subsection 290‑60(1). Note 1: A deduction may be denied by section 85‑25 if the employee is your associate. Note 2: Section 86‑60 (read together with section 86‑75) limits the extent to which superannuation contributions by personal service entities are allowable deductions. (3) Despite subsection 290‑60(2), for you to deduct the contribution the condition in subsection (4) needs to be satisfied instead of the condition in section 290‑70. (4) The other person must be either: (a) engaged in producing the assessable income of the other person's employer; or (b) an Australian resident engaged in the business of the other person's employer. (5) For the purposes of paragraph (1)(b), the circumstances are: (a) you are the beneficial owner of shares in a company of which the other person is an employee, but you do not have a controlling interest in the company; and (b) you are at *arm's length with the other person in relation to the contribution; and (c) neither the other person, nor a *relative of the other person: (i) has set apart an amount as a fund, or has made a contribution to a fund, for the purpose of providing *superannuation benefits for you or a relative of yours; or (ii) has made an *arrangement under which the other person or relative will or may do so. Company controlling interest deductions (6) For the purposes of paragraph (1)(c), the circumstances are: (a) the other person is an employee of an entity that has a controlling interest in the company; or (b) an entity that has a controlling interest in the company also has a controlling interest in a company of which the other person is an employee. 290‑95 Amounts offset against superannuation guarantee charge You cannot deduct a contribution under this Act if you elect under subsection 23A(1) of the Superannuation Guarantee (Administration) Act 1992 that the contribution be offset against your liability to pay superannuation guarantee charge. Note: You cannot deduct a charge imposed by the Superannuation Guarantee Charge Act 1992: see section 26‑95. Returned contributions 290‑100 Returned contributions assessable (1) Your assessable income includes a payment, or the value of a benefit, you receive in the income year so far as it reasonably represents the direct or indirect return of: (a) a contribution for which you or another entity have deducted or can deduct an amount for any income year; or (b) earnings on a contribution of that kind. Note: An example of an indirect return of a contribution is if the fund to which it was made transfers to another fund assets that include the contribution, and the other fund returns the contribution to the person who made it. (2) Subsection (1) does not apply if you receive the payment, or the value of the benefit, as a *superannuation benefit. Subdivision 290‑C—Deducting personal contributions Table of sections 290‑150 Personal contributions deductible Conditions for deducting a personal contribution 290‑155 Complying superannuation fund condition 290‑160 Maximum earnings as employee condition 290‑165 Age‑related conditions 290‑170 Notice of intent to deduct conditions 290‑175 Deduction limited by amount specified in notice 290‑180 Notice may be varied but not revoked or withdrawn 290‑150 Personal contributions deductible (1) You can deduct a contribution you make to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for yourself (regardless whether the benefits are payable to your *SIS dependants if you die before or after becoming entitled to receive the benefits). Note: Other provisions of this Act and the Income Tax Assessment Act 1936 may reduce, increase or deny the deduction in certain circumstances. For example, see section 26‑55 of this Act. (2) However, the conditions in sections 290‑155, 290‑160, 290‑165 and 290‑170 must also be satisfied for you to deduct the contribution. (3) You can deduct the contribution only for the income year in which you made the contribution. Conditions for deducting a personal contribution 290‑155 Complying superannuation fund condition If the contribution is made to a *superannuation fund, it must be a *complying superannuation fund for the income year of the fund in which you made the contribution. 290‑160 Maximum earnings as employee condition (1) This section applies if: (a) in the income year in which you make the contribution, you engage in any of these activities: (i) holding an office or appointment; (ii) performing functions or duties; (iii) engaging in work; (iv) doing acts or things; and (b) the activities result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted). (2) To deduct the contribution, less than 10% of the total of the following must be attributable to the activities: (a) your assessable income for the income year; (b) your *reportable fringe benefits total for the income year. 290‑165 Age‑related conditions (1) If you were under the age of 18 at the end of the income year in which you made the contribution, you must have *derived income in the income year: (a) from the carrying on of a *business; or (b) attributable to activities covered by subsection 290‑160(1). (2) In any other case, you must have made the contribution on or before the day that is 28 days after the end of the month in which you turn 75. 290‑170 Notice of intent to deduct conditions Deductibility of contributions (1) To deduct the contribution, or a part of the contribution: (a) you must give to the trustee of the fund or the *RSA provider a valid notice, in the *approved form, of your intention to claim the deduction; and (b) the notice must be given before: (i) if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year—the end of that day; or (ii) otherwise—the end of the next income year; and (c) the trustee or provider must have given you an acknowledgment of receipt of the notice. Validity of notices (2) The notice is not valid if at least one of these conditions is satisfied: (a) the notice is not in respect of the contribution; (b) the notice includes all or a part of an amount covered by a previous notice; (c) when you gave the notice: (i) you were not a member of the fund or the holder of the *RSA; or (ii) the trustee or *RSA provider no longer holds the contribution; or (iii) the trustee or RSA provider has begun to pay a *superannuation income stream based in whole or part on the contributions; (d) before you gave the notice: (i) you had made a contributions‑splitting application (within the meaning given by the regulations) in relation to the contribution; and (ii) the trustee or RSA provider had not rejected the application. Acknowledgment of notice (3) The trustee or provider must, without delay, give you an acknowledgment of a valid notice, subject to subsection (4). (4) The trustee or provider may refuse to give you an acknowledgment of receipt of a valid notice if the *value of the *superannuation interest into which the contribution is made, at the end of the day on which the trustee or *RSA provider received the notice, is less than the tax that would be payable in respect of your contribution (or part of the contribution) if the trustee or provider were to acknowledge receipt of the notice. 290‑175 Deduction limited by amount specified in notice You cannot deduct more for the contribution (or a part of the contribution) than the amount stated in the notice. 290‑180 Notice may be varied but not revoked or withdrawn (1) You cannot revoke or withdraw a valid notice in relation to the contribution (or a part of the contribution). (2) You can vary a valid notice, but only so as to reduce the amount stated in relation to the contribution (including to nil). You do so by giving notice to the trustee or the *RSA provider in the *approved form. (3) However, you cannot vary a valid notice after: (a) if you have lodged your *income tax return for the income year in which the contribution was made on a day before the end of the next income year—the end of that day; or (b) otherwise—the end of the next income year. (4) Subsection (3) does not apply to a variation if: (a) you claimed a deduction for the contribution (or a part of the contribution); and (b) the deduction is not allowable (in whole or in part); and (c) the variation reduces the amount stated in relation to the contribution by the amount not allowable as a deduction. Subdivision 290‑D—Tax offsets for spouse contributions Table of sections 290‑230 Offset for spouse contribution 290‑235 Limit on amount of tax offsets 290‑240 Tax file number 290‑230 Offset for spouse contribution (1) You are entitled to a *tax offset for an income year for a contribution you make in the income year to a *superannuation fund, or an *RSA, for the purpose of providing *superannuation benefits for your *spouse (regardless whether the benefits are payable to your spouse's *SIS dependants if your spouse dies before or after becoming entitled to receive the benefits). (2) You are entitled to the *tax offset only if: (a) he or she was your *spouse when you made the contribution; and (b) both you and your spouse were Australian residents when you made the contribution; and (c) the total of your spouse's assessable income and *reportable fringe benefits total for the income year is less than $13,800; and (d) you have not deducted and cannot deduct an amount for the contribution under section 290‑60 (employer contributions); and (e) if the contribution is made to a *superannuation fund—it is a *complying superannuation fund for the income year of the fund in which you make the contribution. (3) You are not entitled to the *tax offset if, when you make the contribution, you are living separately and apart from your *spouse on a permanent basis. (4) You are not entitled to the *tax offset for an amount paid by you, as mentioned in regulations under the Family Law Act 1975, to a regulated superannuation fund (within the meaning of that Act), or to an *RSA, to be held for the benefit of your *non‑member spouse in satisfaction of his or her entitlement in respect of the *superannuation interest concerned. 290‑235 Limit on amount of tax offsets (1) The total of the amounts of *tax offset to which you are entitled for contributions you make for an income year cannot exceed 18% of the lesser of the following: (a) $3,000 reduced by the amount (if any) by which the total mentioned in paragraph 290‑230(2)(c) for the income year exceeds $10,800; (b) the sum of the *spouse contributions you make in the income year. (2) The maximum *tax offset to which you are entitled for an income year is $540, even if you are entitled to a tax offset for more than 1 *spouse. 290‑240 Tax file number If you are entitled to the *tax offset for the contribution, you may, with your *spouse's consent, quote your spouse's *tax file number to the trustee (or *RSA provider) of the *superannuation fund (or *RSA) to which the contribution is made. Division 292—Excess contributions tax Table of Subdivisions Guide to Division 292 292‑A Object of this Division 292‑B Excess concessional contributions tax 292‑C Excess non‑concessional contributions tax 292‑D Modifications for defined benefit interests 292‑E Excess contributions tax assessments 292‑F Amending excess contributions tax assessments 292‑G Collection and recovery 292‑H Other provisions Guide to Division 292 292‑1 What this Division is about This Division limits the superannuation contributions made in a financial year for a person that receive concessionally taxed treatment. Subdivision 292‑A—Object of this Division Table of sections 292‑5 Object of this Division 292‑5 Object of this Division The object of this Division is to ensure that the amount of concessionally taxed *superannuation benefits that a person receives results from superannuation contributions that have been made gradually over the course of the person's life. Subdivision 292‑B—Excess concessional contributions tax 292‑10 What this Subdivision is about This Subdivision defines concessional contributions and excess concessional contributions, and sets liability to pay excess concessional contributions tax. Table of sections Operative provisions 292‑15 Liability for excess concessional contributions tax 292‑20 Your excess concessional contributions for a financial year 292‑25 Your concessional contributions for a financial year Operative provisions 292‑15 Liability for excess concessional contributions tax You are liable to pay *excess concessional contributions tax imposed by the Superannuation (Excess Concessional Contributions Tax) Act 2007 if you have *excess concessional contributions for a *financial year. Note: The amount of the tax is set out in that Act. 292‑20 Your excess concessional contributions for a financial year (1) You have excess concessional contributions for a *financial year if the amount of your *concessional contributions for the year exceeds your *concessional contributions cap for the year. The amount of the excess concessional contributions is the amount of the excess. (2) Your concessional contributions cap for the 2007‑2008 *financial year is $50,000. This amount is indexed annually. Note: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the amount of the cap: see section 960‑285. Note 2: For transitional rules about the period from 1 July 2007 to 30 June 2012, see section 292‑20 of the Income Tax (Transitional Provisions) Act 1997. 292‑25 Your concessional contributions for a financial year (1) The amount of your concessional contributions for a *financial year is the sum of: (a) each contribution covered under subsection (2); and (b) each amount covered under subsection (3). Note: For rules about defined benefit interests, see Subdivision 292‑D. (2) A contribution is covered under this subsection if: (a) it is made in the *financial year to a *complying superannuation plan in respect of you; and (b) it is included in the assessable income of the *superannuation provider in relation to the plan; and (c) it is not any of the following: (i) an amount mentioned in subsection 295‑200(2); (ii) an amount mentioned in item 2 of the table in subsection 295‑190(1); (iii) a contribution made to a *constitutionally protected fund. (3) An amount in a *complying superannuation plan is covered under this subsection if it is allocated by the *superannuation provider in relation to the plan for you for the year (other than an amount paid for or by you to the plan) to the extent to which the allocated amount exceeds an amount that, according to rules specified in the regulations, is reasonable having regard to: (a) the amounts paid for or by you to the superannuation plan; and (b) the plan's investment earnings relating to your *superannuation interest or interests in the plan; and (c) any other relevant matters. (4) Disregard Subdivision 295‑D for the purposes of paragraph (2)(b). Subdivision 292‑C—Excess non‑concessional contributions tax 292‑75 What this Subdivision is about This Subdivision defines non‑concessional contributions and excess non‑concessional contributions, and sets liability to pay excess non‑concessional contributions tax. Table of sections Operative provisions 292‑80 Liability for excess non‑concessional contributions tax 292‑85 Your excess non‑concessional contributions for a financial year 292‑90 Your non‑concessional contributions for a financial year 292‑95 Contributions arising from structured settlements or orders for personal injuries 292‑100 Contribution relating to some CGT small business concessions 292‑105 CGT cap amount Operative provisions 292‑80 Liability for excess non‑concessional contributions tax You are liable to pay *excess non‑concessional contributions tax imposed by the Superannuation (Excess Non‑concessional Contributions Tax) Act 2007 if you have *excess non‑concessional contributions for a *financial year. Note: The amount of the tax is set out in that Act. 292‑85 Your excess non‑concessional contributions for a financial year (1) You have excess non‑concessional contributions for a *financial year if the amount of your *non‑concessional contributions for the year exceeds your *non‑concessional contributions cap for the year. The amount of the excess non‑concessional contributions is the amount of the excess. (2) Your non‑concessional contributions cap for the year is the amount that is 3 times your *concessional contributions cap for the year. (3) However, subsection (4) applies instead of subsection (2) in determining your non‑concessional contributions cap for a *financial year (the first year) if: (a) your *non‑concessional contributions for the first year exceed the amount mentioned in subsection (2) for that year; and (b) you are under 65 years at any time in the first year; and (c) a previous operation of subsection (4) does not determine your non‑concessional contributions cap for the first year. (4) Work out your non‑concessional contributions cap for the first year and for the following 2 *financial years (the second year and third year) as follows: (a) your cap for the first year is 3 times the amount mentioned in subsection (2) for the first year; (b) your cap for the second year is: (i) if your *non‑concessional contributions for the first year fall short of your cap for the first year (worked out under paragraph (a))—the shortfall; or (ii) otherwise—nil; (c) your cap for the third year is: (i) if your *non‑concessional contributions for the second year fall short of your cap for the second year (worked out under paragraph (b))—the shortfall; or (ii) otherwise—nil. 292‑90 Your non‑concessional contributions for a financial year (1) The amount of your non‑concessional contributions for a *financial year is the sum of: (a) each contribution covered under subsection (2); and (b) the amount of your *excess concessional contributions (if any) for the financial year. (2) A contribution is covered under this subsection if: (a) it is made in the *financial year to a *complying superannuation plan in respect of you; and (b) it is not included in the assessable income of the *superannuation provider in relation to the *superannuation plan; and (c) it is not any of the following: (i) a Government co‑contribution made under the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003; (ii) a contribution covered under section 292‑95 (payments that relate to structured settlements or orders for personal injuries); (iii) a contribution covered under section 292‑100 (certain CGT‑related payments), to the extent that it does not exceed your *CGT cap amount when it is made; (iv) a contribution made to a *constitutionally protected fund (other than a contribution included in the *contributions segment of your *superannuation interest in the fund); (v) contributions not included in the assessable income of the superannuation provider in relation to the superannuation plan because of a choice made under section 295‑180; (vi) a contribution that is a *roll‑over superannuation benefit. (3) Disregard Subdivision 295‑D for the purposes of paragraph (2)(b). 292‑95 Contributions arising from structured settlements or orders for personal injuries (1) A contribution is covered under this section if: (a) the contribution arises from: (i) the settlement of a claim that satisfies the conditions in subsection (3); or (ii) the settlement of a claim in relation to a personal injury suffered by you under a law of the Commonwealth or of a State or Territory relating to workers compensation; or (iii) the order of a court that satisfies the conditions in subsection (4); and (b) the contribution is made within 90 days after the later of the following: (i) the day of receipt of the payment from which the contribution is made; or (ii) in relation to subparagraph (a)(i) or (iii)—the day mentioned in subsection (2); and (c) 2 legally qualified medical practitioners have certified that, because of the personal injury, it is unlikely that you can ever be *gainfully employed in a capacity for which you are reasonably qualified because of education, experience or training; and (d) no later than the time the contribution is made to a *superannuation plan, you or your *legal personal representative notify the *superannuation provider in relation to the plan, in the *approved form, that this section is to apply to the contribution. (2) For the purposes of subparagraph (1)(b)(ii), the day is: (a) for a settlement mentioned in subparagraph (a)(i): (i) the day on which the agreement mentioned in paragraph (3)(c) was entered into; or (ii) if that agreement depends, for its effectiveness, on being approved (however described) by an order of a court, or on being embodied in a consent order made by a court—the day on which that order was made; or (b) for an order mentioned in subparagraph (1)(a)(iii)—the day on which the order was made. (3) For the purposes of subparagraph (1)(a)(i), the conditions are as follows: (a) the claim: (i) is for compensation or damages for, or in respect of, personal injury suffered by you; and (ii) is made by you or your *legal personal representative; (b) the claim is based on the commission of a wrong, or on a right created by statute; (c) the settlement takes the form of a written agreement between the parties to the claim (whether or not that agreement is approved by an order of a court, or is embodied in a consent order made by a court). (4) For the purposes of subparagraph (1)(a)(iii), the conditions are as follows: (a) the order is made in respect of a claim that: (i) is for compensation or damages for, or in respect of, personal injury suffered by you; and (ii) is made by you or your *legal personal representative; (b) the claim is based on the commission of a wrong, or on a right created by statute; (c) the order is not an order approving or endorsing an agreement as mentioned in paragraph (3)(c). (5) If a claim is both: (a) for compensation or damages for personal injury suffered by you; and (b) for some other remedy (for example, compensation or damages for loss of, or damage to, property); subsections (3) and (4) apply to the claim, but only to the extent that it relates to the compensation or damages referred to in paragraph (a), and only to amounts that, in the settlement agreement, or in the order, are identified as being solely in payment of that compensation or those damages. 292‑100 Contribution relating to some CGT small business concessions (1) A contribution is covered under this section if: (a) the contribution is made by you to a *complying superannuation plan in respect of you in a *financial year; and (b) the requirement in subsection (2), (4), (7) or (8) is met; and (c) you choose, in accordance with subsection (9), to apply this section to an amount that is all or part of the contribution. (2) The requirement in this subsection is met if: (a) the contribution is equal to all or part of the *capital proceeds from a *CGT event for which you can disregard any *capital gain under section 152‑105 (or would be able to do so, assuming that a capital gain arose from the event); and (b) the contribution is made no later than either of the following: (i) the day you are required to lodge your tax return for the income year in which the CGT event happened; (ii) 30 days after the day you receive the capital proceeds. (3) For the purposes of paragraph (2)(a), ignore the requirement in paragraph 152‑105(b) if you are permanently incapacitated at the time of the *CGT event but were not permanently incapacitated at the time the relevant *CGT asset was acquired. (4) The requirement in this subsection is met if: (a) just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under section 152‑110, disregard any *capital gain arising from the CGT event (or would be able to do so, assuming that a capital gain arose from the event); and (b) the entity makes a payment to you within 2 years after the CGT event; and (c) the contribution is equal to all or part of your stakeholder's control percentage (within the meaning of subsection 152‑125(3)) of the *capital proceeds from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and (d) the contribution is made within 30 days after the payment mentioned in paragraph (b). (5) In determining whether the conditions in subsection (2) or (4) are satisfied for a *CGT event in relation to a *pre‑CGT asset, treat the asset as a *post‑CGT asset. (6) For the purposes of paragraph (4)(a), ignore the requirement in paragraph 152‑110(1)(b) if a *controlling individual was permanently incapacitated at the time of the *CGT event but was not permanently incapacitated when the relevant *CGT asset was acquired. (7) The requirement in this subsection is met if: (a) the contribution is equal to all or part of the *capital gain from a *CGT event that you disregarded under subsection 152‑305(1); and (b) the contribution is made no later than either of the following: (i) the day you are required to lodge your tax return for the income year in which the CGT event happened; (ii) 30 days after the day you receive the *capital proceeds from the CGT event. (8) The requirement in this subsection is met if: (a) just before a *CGT event, you were a *CGT concession stakeholder of an entity that could, under subsection 152‑305(2), disregard all or part of a *capital gain arising from the CGT event; and (b) the entity makes a payment to you that satisfies the conditions in section 152‑325; and (c) the contribution is equal to all or part of the capital gain arising from the CGT event (but not exceeding the amount of the payment mentioned in paragraph (b)); and (d) the contribution is made within 30 days after the payment mentioned in paragraph (b). (9) To make a choice for the purposes of paragraph (1)(c), you must: (a) make the choice in the *approved form; and (b) give it to the *superannuation provider in relation to the *complying superannuation plan on or before the time when the contribution is made. 292‑105 CGT cap amount (1) Your CGT cap amount at the start of the 2007‑2008 *financial year is $1,000,000. Note: For transitional rules about contributions made in the period from 10 May 2006 to 30 June 2007, see section 292‑80 of the Income Tax (Transitional Provisions) Act 1997. Reductions and increases (2) If a contribution covered by section 292‑100 is made in respect of you at a time, reduce your CGT cap amount just after that time: (a) if the contribution falls short of your *CGT cap amount at that time—by the amount of the contribution; or (b) otherwise—to nil. (3) At the start of each *financial year after the 2007‑2008 financial year, increase your CGT cap amount by the amount (if any) by which the index amount for that financial year exceeds the index amount for the previous financial year. (4) For the purposes of subsection (3), the index amount for the 2007‑2008 *financial year is $1,000,000. The index amount is then indexed annually. Note: Subdivision 960‑M shows how to index amounts. However, annual indexation does not necessarily increase the index amount: see section 960‑285. Subdivision 292‑D—Modifications for defined benefit interests 292‑155 What this Subdivision is about This Subdivision modifies the meaning of concessional contributions relating to defined benefits interests. Table of sections Operative provisions 292‑160 Application 292‑165 Concessional contributions—special rules for defined benefit interests 292‑170 Notional taxed contributions 292‑175 Defined benefit interest Operative provisions 292‑160 Application (1) This Subdivision applies if, in a *financial year, you have: (a) a *superannuation interest that is or includes a *defined benefit interest; or (b) more than one superannuation interest that is or includes a defined benefit interest. (2) However, this Subdivision does not apply in relation to a *superannuation interest in a *constitutionally protected fund. 292‑165 Concessional contributions—special rules for defined benefit interests Despite section 292‑25, the amount of your concessional contributions for the *financial year is the sum of: (a) the contributions covered by subsection 292‑25(2), and the amounts covered by subsection 292‑25(3), to the extent to which they do not relate to the *defined benefit interest or interests; and (b) your *notional taxed contributions for the financial year in respect of the defined benefit interest or interests. 292‑170 Notional taxed contributions (1) Your notional taxed contributions for a *financial year in respect of a *defined benefit interest has the meaning given by the regulations. (2) Regulations made for the purposes of subsection (1) may provide for a method of determining the amount of the notional taxed contributions. (3) Regulations made for the purposes of subsection (1) may define the *notional taxed contributions, and the amount of notional taxed contributions, in different ways depending on any of the following matters: (a) the person who has the *superannuation interest that is or includes the *defined benefit interest; (b) the *superannuation plan in which the superannuation interest exists; (c) the *superannuation provider in relation to the superannuation plan; (d) any other matter. (4) Regulations made for the purposes of subsection (1) may specify circumstances in which the amount of *notional taxed contributions for a *financial year is nil. (5) Subsections (2), (3) and (4) do not limit the regulations that may be made for the purposes of this section. (6) Despite subsection (1), your notional taxed contributions for the *financial year in respect of the *defined benefit interest are equal to your *concessional contributions cap for the financial year if: (a) this Subdivision applies in relation to you because you have a defined benefit interest in a financial year; and (b) apart from this subsection, the notional taxed contributions for the financial year in respect of the defined benefit interest exceed your concessional contributions cap for the financial year; and (c) either: (i) you held the defined benefit interest in a *superannuation fund on 5 September 2006; or (ii) all the requirements in subsection (7) are satisfied; and (d) if subparagraph (c)(i) applies and the rules of the superannuation fund have changed since 5 September 2006: (i) the notional taxed contributions mentioned in paragraph (b) do not exceed what they would have been if the rules of the fund had not changed since 5 September 2006; or (ii) all changes to those rules since 5 September 2006 are of a kind specified in the regulations. (7) For the purposes of subparagraph (6)(c)(ii), the requirements are as follows: (a) you held a *defined benefit interest (the original interest) in a *superannuation fund (the original fund) on 5 September 2006; (b) the defined benefit interest mentioned in paragraph (6)(a) (the current interest) is in a different superannuation fund (the current fund); (c) the entire *value of the original interest was transferred to the current interest after 5 September 2006; (d) your rights under the current interest are equivalent to your rights under the original interest; (e) the notional taxed contributions mentioned in paragraph (6)(b) do not exceed what they would have been if: (i) the transfer mentioned in paragraph (c) had not taken place; and (ii) the rules of the original fund had not changed since 5 September 2006, or all changes to those rules since 5 September 2006 are of a kind specified in the regulations; (f) the requirements (if any) specified in the regulations are satisfied. 292‑175 Defined benefit interest (1) An individual's *superannuation interest is a defined benefit interest to the extent that it defines the individual's entitlement to *superannuation benefits payable from the interest by reference to one or more of the following matters: (a) the individual's salary, or allowance in the nature of salary, at a particular date or averaged over a period; (b) another individual's salary, or allowance in the nature of salary, at a particular date or averaged over a period; (c) a specified amount; (d) specified conversion factors. (2) However, an individual's *superannuation interest is not a defined benefit interest if it defines that entitlement solely by reference to one or more of the following: (a) *disability superannuation benefits; (b) *superannuation death benefits; (c) payments of amounts mentioned in paragraph 307‑10(a) (temporary disability payments). Subdivision 292‑E—Excess contributions tax assessments Guide to Subdivision 292‑E 292‑225 What this Subdivision is about The Commissioner may make an assessment of a person's liability to pay excess contributions tax, and the excess contributions on which that liability is based. Table of sections Operative provisions 292‑230 Commissioner must make an excess contributions tax assessment 292‑235 Part‑year assessment 292‑240 Validity of assessment 292‑245 Objections 292‑250 Evidence Operative provisions 292‑230 Commissioner must make an excess contributions tax assessment (1) The Commissioner must make an assessment (an excess contributions tax assessment) of: (a) if a person has *excess concessional contributions for a *financial year—the amount of the excess concessional contributions; and (b) the amount (if any) of *excess concessional contributions tax which the person is liable to pay in relation to the financial year. (2) The Commissioner must make an assessment (also an excess contributions tax assessment) of: (a) if a person has *excess non‑concessional contributions for a financial year—the amount of the excess non‑concessional contributions; and (b) the amount (if any) of *excess non‑concessional contributions tax which the person is liable to pay in relation to the financial year. (3) The Commissioner must give the person notice in writing of an *excess contributions tax assessment as soon as practicable after making the assessment. (4) The notice may be included in a notice of any other assessment under this Act (including an assessment under this section). 292‑235 Part‑year assessment (1) The Commissioner may, at any time during a *financial year (the actual financial year), make an assessment of the matters mentioned in subsection 292‑230(1) for a person for a particular period within that year as if the beginning and end of that period were the beginning and end of a financial year. (2) This Division applies, for the purposes of that assessment, as if: (a) the start and end of the period were the start and end of a *financial year; and (b) the assessment were an excess contributions tax assessment for that financial year. (3) If the Commissioner makes an assessment under subsection (1), he or she must make an assessment under section 292‑230 in relation to the actual financial year as soon as possible after the end of that year. (4) However, the Commissioner does not need to make an assessment mentioned in subsection (3) if he or she is satisfied that the assessment would not differ in a material way from the assessment under subsection (1). 292‑240 Validity of assessment The validity of an *excess contributions tax assessment is not affected because any of the provisions of this Act have not been complied with. 292‑245 Objections If a person is dissatisfied with an *excess contributions tax assessment made in relation to the person, the person may object against the assessment in the manner set out in Part IVC of the Taxation Administration Act 1953. 292‑250 Evidence Section 177 of the Income Tax Assessment Act 1936 applies as if a reference in that section to an assessment or a notice of assessment included a reference to an *excess contributions tax assessment or a notice of an excess contributions tax assessment, as required. Subdivision 292‑F—Amending excess contributions tax assessments Guide to Subdivision 292‑F 292‑300 What this Subdivision is about The Commissioner may amend excess contributions tax assessments within certain time limits. Table of sections Operative provisions 292‑305 Amendments within 4 years of the original assessment 292‑310 Amended assessments are treated as excess contributions tax assessments 292‑315 Later amendments—on request 292‑320 Later amendments—fraud or evasion 292‑325 Further amendment of an amended particular 292‑330 Amendment on review etc. Operative provisions 292‑305 Amendments within 4 years of the original assessment (1) The Commissioner may amend an *excess contributions tax assessment for a person for a *financial year at any time during the period of 4 years after the *original excess contributions tax assessment day for the person for that year. (2) The original excess contributions tax assessment day for a person for a *financial year is the day on which the Commissioner gives the first *excess contributions tax assessment to the person for the financial year. 292‑310 Amended assessments are treated as excess contributions tax assessments (1) Once an amended *excess contributions tax assessment for a person for a *financial year is made, it is taken to be an excess contributions tax assessment for the person for the year. (2) If the Commissioner amends a person's *excess contributions tax assessment, the Commissioner must give the person notice in writing of the amendment as soon as practicable after making the amendment. (3) The notice may be included in a notice of any other assessment under this Act. 292‑315 Later amendments—on request The Commissioner may amend an *excess contributions tax assessment for a person for a *financial year after the end of the period of 4 years after the *original excess contributions tax assessment day for the person for the year if, within that 4 year period: (a) the person applies for the amendment in the *approved form; and (b) the person gives the Commissioner all the information necessary for making the amendment. 292‑320 Later amendments—fraud or evasion (1) If: (a) a person (or a *superannuation provider covered under subsection (2)) does not make a full and true disclosure to the Commissioner of the information necessary for an *excess contributions tax assessment for the person for a *financial year; and (b) in making the assessment, the Commissioner makes an under‑assessment; and (c) the Commissioner is of the opinion that the under‑assessment is due to fraud or evasion; the Commissioner may amend the assessment at any time. (2) A *superannuation provider is covered under this subsection if any of the following conditions are satisfied: (a) contributions have been made to a *superannuation plan of the provider on behalf of the person in the *financial year; (b) an amount is included in the person's *concessional contributions for the financial year under subsection 292‑25(3) because the superannuation provider allocated it to the person; (c) *notional taxed contributions are included in the person's concessional contributions for the financial year under section 292‑165 because of the person's *defined benefit interest in a superannuation plan of the provider. 292‑325 Further amendment of an amended particular If: (a) an *excess contributions tax assessment has been amended (the earlier amendment) in any particular; and (b) the Commissioner is of the opinion that it would be just to further amend the assessment in that particular; the Commissioner may do so within a period of 4 years after the earlier amendment. 292‑330 Amendment on review etc. Nothing in this Subdivision prevents the amendment of an *excess contributions tax assessment: (a) to give effect to a decision on a review or appeal; or (b) to reduce the assessment as a result of an objection or pending an appeal or review. Note: A person may make a complaint to the Superannuation Complaints Tribunal under section 15CA of the Superannuation (Resolution of Complaints) Act 1993 if the person is dissatisfied with a statement given to the Commissioner by a superannuation provider under section 390‑5 in Schedule 1 to the Taxation Administration Act 1953. Subdivision 292‑G—Collection and recovery Guide to Subdivision 292‑G 292‑380 What this Subdivision is about Excess contributions tax is due and payable at the end of 21 days after notice of assessment and the general interest charge applies to unpaid amounts. Money may be released from a superannuation plan to pay the tax. Table of sections Operativ