Below are some responses by the Assistant Treasurer to a series of questions asked by Senator Mathias Cormann (Shadow Assistant Treasurer). These responses reveal some very interesting information about the controversial excess super contributions tax.
- How many people exceed the caps? Figures as at 17 January 2011 show that, since the 2007-08 financial year, almost 188,000 people had potentially exceeded the caps (and the majority of those had likely exceeded the concessional caps). The Assistant Treasurer noted that not all individuals identified as exceeding the contribution caps will receive an assessment. He said a number of cases will be subject to “correction of reporting errors by funds”. Mr Shorten noted that the ATO “takes a practical, risk based approach in relation to cases where the caps are exceeded by only a small amount”.
- Average excess super contributions were $144,989 in 2007-08, $206,028 in 2008-09 and $89,861 in 2009-10 (figures as at 17 January 2011). Mr Shorten said the figures for 2009-10 will change as self-managed super funds and some individuals are not required to lodge 2009-10 information until May and June of 2011.
- Excess super contributions tax collected from individuals for the 2007-08 and 2008-09 financial years totalled $58.2m (almost all of that in 2007-08). The ATO has largely completed the process of issuing assessments in respect of 2007-08 and has commenced issuing assessments for the 2008-09 financial year. Assessments have yet to issue for the 2009-10 financial year. During the transitional period from 10 May 2006 to 30 June 2007, the ATO collected $41.4m in excess contributions tax, averaging $27,748 per individual.
- Exceeding the transitional contributions cap: for the transitional period 10 May 2006 to 30 June 2007, the ATO issued 1,863 assessments to individuals for exceeding the cap. In another 208 cases, the Commissioner applied his discretion.
- ATO administration expenditure on excess contributions tax was $5.1m in 2007-08, $7.6m in 2008-09 and $12.9m in 2009-10. Estimated ATO admin costs in 2010-11 so far are $34.6m. This large increase over 2009-10 is expected to come as assessment activity relating to the 2007-08 year is finalised and commences on the 2008-09 and 2009-10 years.
This article appeared in Thomson Reuters Weekly Tax Bulletin (4 March 2011). Australia’s most comprehensive and informative tax news service, it covers, in clear terms, all tax and related developments from cases, new legislation, tax rulings and major announcements to detailed practitioner articles. To find out more, click here