The ability to determine the level of non-concessional superannuation contributions an individual has made since 1 July 2007 under the new rules contained in this year’s federal budget has already proven to be problematic.
According to DBA Lawyers director Daniel Butler, the budget’s Superannuation Fact Sheet 04 stated the starting date for the monitoring of non-concessional contributions made was chosen because officially it was the date from which the ATO had reliable contribution records.
“Already I’ve picked up from my travels so far on this seminar series that the ATO doesn’t have this information,” Butler told the DBA Lawyers SMSF Strategy Seminar in Sydney.
“They have the information about your contributions, but they don’t know what part of your contributions is deductible and what is not deductible.
“So unless the ATO can revise all of its systems and go back and collect all of that data, the left arm doesn’t know what the right arm is doing it would appear.”
Regardless of the adequacy of the ATO’s record-keeping, he said advisers would still be obliged to approach the regulator and ask for a history of their clients’ non-concessional contributions from 1 July 2007 onward to ensure the lifetime cap was not breached.
“Because you as an adviser, if you stuff up, you’re at risk,” he warned.
He acknowledged the implications for breaching the cap now were a lot less severe than the previous penalties in the area.
“If you get the opportunity to pull the excess contributions out, in that event there is no 49 per cent tax, but you’re paying tax on associated earnings less the offset,” he explained.
“So it’s not as severe, but still we want to be prudent here and we want to be able to properly advise our clients.”
He said he was aware of a situation where an individual asked the ATO for the relevant information on the telephone, but did not get much help from the regulator.