ATO Interpretative Decision
ATO ID 2001/517
Superannuation
Superannuation provider's liability to pay surcharge assessment where it ceases to be the holder of surchargeable contributionsFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the superannuation provider liable to pay the surcharge assessment after it ceased to be the holder of the surchargeable contributions?
Decision
No. Under subsection 10(3) of the Contributions Tax (Assessment and Collection) Act 1997 (SCTA) the superannuation provider is not liable to pay surcharge where the superannuation provider ceases to be the holder of the contributions, or begins to pay a pension or annuity based on the contributions, before the notice of assessment is given to it.
Facts
The superannuation provider, which was a superannuation (accumulation benefits) provider, reported surchargeable contributions paid by an employer for the financial year in respect of the member.
The Commissioner of Taxation (Commissioner) issued a superannuation contributions tax assessment to the superannuation provider in respect of the surchargeable contributions reported for the member
The superannuation provider advised the Commissioner that the total of the surchargeable contributions previously reported for the member had been transferred out before the surcharge assessment on those contributions was made. A proportion of the surchargeable contributions was paid to the member as an eligible termination payment (ETP), and the balance had been rolled-over to another superannuation provider.
The Commissioner cancelled the assessment issued to the superannuation provider and removed its liability to surcharge on those contributions.
The Commissioner issued a superannuation contributions tax assessment to the member in respect of the surchargeable contributions which were included in the ETP paid to the member.
The Commissioner issued a superannuation contributions tax assessment to the member in respect of the surchargeable contributions which were included in the ETP paid to the member.
Reasons for Decision
Section 13 of the SCTA requires the superannuation provider to report to the Commissioner details of a member's total contributed amounts for each financial year including the member's surchargeable contributions. In addition, the superannuation provider is also required to report details of that part of the total contributed amounts transferred by the provider to the member or to another provider.
If the provider is the holder of the surchargeable contributions when the assessment of the surcharge of those contributions is made, the provider is liable to pay the surcharge (subsection 10(2) of the SCTA).
Subsection 10(3) of the SCTA states that the superannuation provider is not liable to pay surcharge where the superannuation provider ceases to be the holder of the contributions, or begins to pay a pension or annuity based on the contributions, before the notice of assessment is made.
The Commissioner issued a superannuation contributions tax assessment (the notice of assessment) to the superannuation provider for the financial year in respect of the member's surchargeable contributions reported by the provider.
However, prior to the receipt of the notice of assessment, the superannuation provider ceased to be the holder of the surchargeable contributions on which the surcharge assessment was made. A proportion of the contributions was rolled over to another superannuation provider, and the balance was paid the member as an ETP.
The Commissioner cancelled the assessment issued to the superannuation provider. The cancellation of the assessment recognised that, as the provider ceased to be the holder of the surchargeable contributions before the assessment was made, it was not liable to pay the surcharge on those contributions.
Date of decision: 9 July 2001
Legislative References:
Superannuation Contributions Tax (Assessment And Collection) Act 1997
subsection 10(2)
subsection 10(3)
subsection 10(4)
section 13
section 15
Keywords
Superannuation contributions
Superannuation contributions surcharge
Holder of the contributions
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 9 July 2001 | Original statement |
| 26 June 2009 | Archived |