Income Tax Assessment Regulations 1997
For subsection 292-170(1) of the Act, this regulation explains the meaning of notional taxed contributions for a financial year in respect of the defined benefit interest of a member of a superannuation fund if regulation 292-170.02 does not apply. 292-170.03(2)
If the trustee receives a contribution in a month, the trustee must allocate the contribution to a member of the fund:
(a) within 28 days after the end of the month; or
(b) if it is not reasonably practicable to comply with paragraph (a) - within a longer period that is reasonable in the circumstances. 292-170.03(3)
For subregulation (2), the trustee must allocate the contribution having regard to the present and prospective liabilities of the fund to its members. 292-170.03(4)
The notional taxed contributions are the amounts of assessable contributions under Subdivision 295-C of the Act which have been allocated to the member in the financial year. 292-170.03(5)
An amount that is allocated from a reserve is to be treated as having been allocated by the superannuation provider in a way that is covered by subsection 291-25(3) of the Act unless:
(a) the amount is allocated from a reserve used solely for the purpose of enabling the fund to discharge all or part of its liabilities (contingent or not), as soon as they become due, in respect of superannuation income stream benefits that are payable by the fund at that time; and
(b) any of the following applies:
(i) the amount has been allocated to satisfy a pension liability of the plan paid during the financial year;
(ii) on the commutation of the income stream, except as a result of the death of the primary beneficiary, the amount is allocated to the recipient of the income stream, to commence another income stream, as soon as practicable;
(iii) on the commutation of the income stream as a result of the death of the primary beneficiary, the amount:
(A) is allocated to a death benefits dependant to discharge liabilities in respect of a superannuation income stream benefit that is payable by the plan as a result of the death; oras soon as practicable.
(B) if sub-subparagraph (A) does not apply - is paid as a superannuation lump sum and as a superannuation death benefit;
If the amount has been allocated from a reserve in lieu of a contribution to the fund (less any allowance for tax) which would have been assessable income of the fund, the amount that is allocated is to be multiplied by 1.176.
An employer has an obligation to make a $1 000 contribution. Instead of the employer making a contribution to the fund, the trustee allocates $850 to the member ' s account (which is an amount equivalent to the amount that would be credited to the account after tax was paid).
For subregulation (6), the amount of $850 is to be multiplied by 1.176 to work out the amount that is taken to be allocated.