ATO Interpretative Decision
ATO ID 2002/462 (Withdrawn)
Superannuation
Allocated Pension and additional undeducted contributionsFOI status: may be released
-
This decision does not accurately indicate the ATO view due to changes in legislation and has been withdrawnThis 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
What happens to an allocated pension when additional undeducted contributions are made after the pension has started?
Decision
An increase in the undeducted purchase price of an allocated pension, by way of additional undeducted contributions, results in the cessation of the old pension and the start of a new pension.
The new allocated pension has to be reported for reasonable benefit limits (RBL) purposes.
Facts
The taxpayer receives an allocated pension from a self managed superannuation fund (SMSF).
The taxpayer made an additional undeducted contribution after the allocated pension commenced to be payable.
The SMSF is a complying superannuation fund that has commenced to pay an allocated pension.
The taxpayer, as at the date of the contribution was eligible to make the contribution into the SMSF under the minimum standards prescribed in the Superannuation Industry (Supervision) Regulations (SIS Regulations).
Reasons for Decision
An increase in the undeducted purchase price of an allocated pension, by way of additional undeducted contributions, results in the cessation of the old pension and the start of a new pension.
However, the cessation of the old pension does not involve a payment so does not qualify as a qualifying eligible termination payment under section 27D of the Income Tax Assessment Act 1936 (ITAA 1936) and will not be reported for RBL purposes under section 140Q of the ITAA 1936. No adjustment under 140ZP of the ITAA 1936 will be made. The new pension will be counted for RBL purposes.
The taxpayer was eligible to make a contribution into the SMSF pursuant to Part 7 of the SIS Regulations.
Date of decision: 13 December 2001Year of income: Year ending 30 June 2002
Legislative References:
Income Tax Assessment Act 1936
Subsection 27D
Section 140Q
Section 140ZP
Part 7
Keywords
Termination payments, superannuation & retirement income
Annuities & superannuation pensions
Undeducted purchase price
Deductible amount
Reasonable Benefit Limits
ISSN: 1445-2782
| Date: | Version: | |
| 13 December 2001 | Original statement | |
| You are here | 4 August 2003 | Archived |