ATO Interpretative Decision
ATO ID 2002/554 (Withdrawn)
Superannuation
Superannuation Contributions Surcharge - calculation of adjusted taxable income.FOI 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This ATO ID is withdrawn because superannuation contributions surcharge is not payable on surchargeable contributions for financial years after the 2004-2005 financial year.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 in respect of superannuation contributions surcharge for financial years from 1996-1997 up to and including 2004-2005.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the extra amount that is included in a member's assessable income where a franked dividend is paid under section 160AQT of the Income Tax Assessment Act 1936 (ITAA 1936) also included in the member's adjusted taxable income (ATI ) under section 43 of the Superannuation Contributions Tax (Assessment & Collection) Act 1997 (SCTA 1997)?
Decision
Yes, the extra amount that is included in a member's assessable income where a franked dividend is paid under section 160AQT of ITAA 1936 is to be included in the member's ATI under section 43 of the SCTA 1997.
Facts
The member received franked dividends for the relevant financial year and received an imputation credit in his notice of assessment.
The person was a member of an accumulation superannuation fund.
The member subsequently received an advice indicating that a superannuation surcharge assessment issued to his superannuation provider in relation to surchargeable contributions reported for the relevant period.
The Commissioner calculated the member's ATI on the taxable income in the notice of assessment and reported surchargeable contributions for the relevant year.
Reasons for Decision
A franked dividend is a dividend paid or credited to a shareholder by an Australian resident company from profits that have had Australian company tax paid on them (sections 160APA and 160AQF of the ITAA 1936).
A shareholder who receives a franked dividend is required to include it in his assessable income an extra amount under section 160AQT of the ITAA 1936. The extra amount is equivalent to the amount of company tax attributable to the dividend. The shareholder is then entitled to claim that amount as an imputation credit under section 160AQU of the ITAA 1936.
For each financial year in which the member has surchargeable contributions, section 15 of the SCTA 1997 requires the Commissioner to calculate the member's ATI. Under section 43 of the SCTA 1997, a member's ATI includes the member's taxable income plus his surchargeable contributions for the financial year.
As the extra amount of the dividend income was included in the member's taxable income it has to be included in the ATI for the calculation of the member's superannuation surcharge.
Date of decision: 28 May 2002Year of income: Year ended 30 June 2000
Legislative References:
Income Tax Assessment Act 1936
section 160APA
section 160AQF
section 160AQT
section 160AQU
section 15
section 43 Related ATO Interpretative Decisions
ATO ID 2001/609
Keywords
Franked dividends
Dividend income
Superannuation contributions surcharge
Imputation credits
Adjusted taxable income - superannuation contributions surcharge
ISSN: 1445-2782
| Date: | Version: | |
| 28 May 2002 | Original statement | |
| You are here | 29 May 2009 | Archived |