ATO Interpretative Decision
ATO ID 2001/460 (Withdrawn)
Superannuation
Superannuation contributions tax- Request for approval of Another Method for Surcharge CalculationsFOI status: may be released
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This ATO ID is withdrawn because superannuation contributions surcharge is not payable on surchargeable contributions for financial years after the 2004-2005 financial year. Despite its withdrawal, this ATO ID is still a precedential view for decisions i.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Does the Commissioner approve another method for the calculation of surchargeable contributions for a member of a defined benefits superannuation scheme, based solely on the member's increase in vested benefits.
Decision
No. The Commissioner is not satisfied that it is appropriate to approve another method for the scheme based on the member's increase in vested benefits.
Facts
The superannuation scheme is a defined benefits superannuation scheme.
The trustee of the superannuation scheme has suggested the most appropriate method for calculating surchargeable contributions for the relevant years for the scheme is to base the calculation on the value of vested benefits each financial year and not on the benefits promised under the scheme rules.
Reasons for Decision
The surchargeable contributions of a member of a defined benefit superannuation scheme are the actuarial value of the benefits that accrued to, and the value of the administration expenses and risk benefits provided in respect of, a member for the financial year.
Subsection 8(4) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) specifies the method to be used when calculating surchargeable contributions for the financial years ended 30 June 1997, 1998 and 1999. That method sets out the formula to be used as
annual salary * notional surchargeable contributions factor (NSCF)
where the NSCF is to be calculated by an eligible actuary in line with the method set out in Superannuation Contributions Ruling SCR 97/1 (unless another method has been approved by the Commissioner).
Regulation 2L of the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997 ensures that the same formula applies for calculating surchargeable contributions for the year ended 30 June 2000.
The method set out in Superannuation Contributions Ruling SCR 97/1 for calculating NSCF provides actuaries with a standard to follow and reflects the intention that NSCF be calculated as the present value of employer provided benefits accruing in the year using actuarial assumptions set out in the Ruling.
Schedule 2 to the Superannuation Contributions Tax (Assessment and Collection) Regulations 1997 sets out the standard method for calculating surchargeable contributions.
Superannuation Contributions Ruling SCR 97/1 reflects the position that in defined benefits schemes surchargeable contributions will not differ with the underlying financial position of the scheme.
The standard method for calculating surchargeable contributions for members of defined benefits schemes that has been approved by the Parliament subsequent to the issue of SCR 97/1 reflects the same position (that is, Parliament's intention is that surchargeable contributions will not differ with the underlying financial position of the scheme).
Date of decision: 3 September 2001Year of income: Year ended 30 June 1997, year ended 30 June 1998, year ended 30 June 1999 and year ended 30 June 2000
Legislative References:
Superannuation Contributions Tax (Assessment and Collection) Act 1997
subsection 8(3)
subsection 8(4)
subsection 8(5)
regulation 2L
Schedule 2
Related Public Rulings (including Determinations)
Superannuation Contributions Ruling SCR 97/1
Keywords
Superannuation contributions tax
Superannuation provider - defined benefits
Surchargeable contributions
Actuarial value of benefits
Notional surchargeable contributions factor
ISSN: 1445-2782
| Date: | Version: | |
| 3 September 2001 | Original statement | |
| You are here | 7 May 2010 | Archived |