ATO Interpretative Decision
ATO ID 2001/10
SuperannuationSuperannuation contributions surcharge (Advance Payment of Long Service Leave)
FOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Whether the taxpayer's advance payment for long service leave is included in the calculation of adjusted taxable income for superannuation contributions surcharge purposes.
The advance payment for long service leave is included in the calculation of adjusted taxable income for superannuation contributions surcharge purposes.
1. The taxpayer received a 'Member Superannuation Contributions Surcharge Advice' issued on 15 May 1998 in respect of the year ended 30 June 1997. It was indicated on the notice that it was an 'Advice Only - Do Not Pay'.
2. The benefit structure type is unfunded defined benefits account according to the Superannuation Contributions Surcharge System (SCS System).
3. The taxpayer stated in their letter of 30 June 1998 that they received an advance payment for long service leave in June 1997. The taxpayer indicated that this amount has 'inflated' their 'adjusted taxable income' for the purposes of calculating surcharge liability for the 1997 year.
4. The taxpayer has stated that if it were not for this payment in advance, there would be no surcharge liability in respect of the years ended 30 June 1997 and 30 June 1998.
5. The taxpayer has asked for a reconsideration of the surcharge liability in view of the above.
Reasons For Decision
Section 43 of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, defines a member's 'adjusted taxable income' for the purposes of determining whether the member's 'adjusted taxable income' exceeds the surcharge threshold for the financial year. It includes the member's taxable income for an income year less any amounts included in assessable income for that year that were eligible termination payments within the meaning of section 27A(1) (except paragraph a) of the Income Tax Assessment Act 1936 and less lump sums for unused annual leave and long service leave paid on termination of employment because of bona fide redundancy, early retirement or invalidity.
The payment in advance for 13 weeks long service leave which the taxpayer received in June 1997 forms part of the taxpayer's taxable income for the year ended 30 June 1997. Accordingly, the whole amount of the taxpayer's taxable income for the year ended 30 June 1997, including the advance payment for long service leave, is included in the calculation of 'adjusted taxable income' for the year ended 30 June 1997.Date of decision: 17 August 1998 Superannuation Contributions Tax (Assessment and Collection) Act 1997
Adjusted taxable income
Superannuation contributions tax