Sladen snippet – Recent successes with excess contributions

Sladen Legal had two recent successful applications to disregard or reallocate excess non-concessional contributions, with the result that significant excess contributions assessments were extinguished or reduced to a nominal amount.

In the first case the client inadvertently triggered the bring forward rule by paying what she thought was an insurance premium, but was in fact a contribution to a retail superannuation fund (that in turn funded an insurance policy held by the fund). The client also made a $150K non-concessional contribution in that year followed by a $450K in the following year (causing excess non-concessional contributions of over $150K). The Commissioner of Taxation agreed that special circumstances existed and agreed to reallocate the “insurance” contribution to the second year reducing the excess contributions tax from over $70K to approximately $1,500.

In the second case the client suffered an accident that triggered the payment of an insurance policy held by his corporate superannuation fund. Unfortunately, the proceeds could not be paid to the client, or his account, as he did not satisfy the total and permanent disability definition in the trust deed. The fund’s trustee agreed to allocate the insurance policy proceeds to the client’s member account which caused an excess concessional and non-concessional contribution assessment. The Commissioner of Taxation again agreed that special circumstances existed and agreed to disregard the excess contributions resulting in an excess non-concessional contribution assessment of over $125K being reduced to nil.

For further information please contact:

Phil Broderick
Sladen Legal
03 9611 0163