The passage of the amendments to the excess contributions tax regime through the Senate has received support from the SMSF Professionals’ Association of Australia (SPAA).
The new rules governing the concessional contribution caps come into effect today and will allow breaches of the limit to be withdrawn from superannuation funds and not just on a once-only basis.
Furthermore, taxes charged on excess concessional contributions will now be levied at the marginal rate of the individual as opposed to the top marginal tax rate.
“We have long championed a refunding solution for excess contributions tax to ensure taxpayers are not treated in a draconian way for accidently breaching their superannuation contribution caps,” SPAA chief executive Andrea Slattery.
“This gives people a genuine chance at rectifying any mistakes they had made with their concessional contributions.
“These new rules strike the right balance between ensuring that taxpayers adhere to the contribution cap while providing adequate penalties for those who breach the concessional contributions cap.”
While it endorsed the current amendments to the legislation, SPAA called on the government to take the changes a step further by giving superannuants the ability to withdraw excess non-concessional contributions as well.
“It is the excess non-concessional contribution breaches that usually attract significant amounts of excess contributions tax. We also believe that the interest rate should not apply retrospectively,” Slattery said.
