ATO Interpretative Decision

ATO ID 2003/29 (Withdrawn)

Superannuation

Reasonable benefit limits: previous benefits
FOI status: may be released

This ATO ID is withdrawn from the database because it contains a view in respect of provisions of Division 14 of Part III of the Income Tax Assessment Act 1936. That Division does not apply for the 2007-08 income year and later income years. This ATO ID continues to be a precedential view in respect of decisions for income years up to, and including, the 2006-07 income year.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 pension paid to the recipient taken into account as a previous benefit when an eligible termination payment (ETP) is determined for reasonable benefit limits (RBL) purposes?

Decision

Yes, the superannuation pension is taken into account as a previous benefit.

Facts

Under the rules of the superannuation fund the recipient is entitled to both a pension and lump sum benefit.

The payer reports the two benefits to the Australian Taxation Office (ATO). The ETP is paid on a day later than the commencement day of the superannuation pension.

Reasons for Decision

When a benefit is reported to the ATO, subsection 140R(1) of the Income Tax Assessment Act 1936 (ITAA 1936) requires the Commissioner to make a determination as to the extent to which a benefit is in excess of a person's RBL. A benefit is defined in section 140C of the ITAA 1936 to mean a superannuation pension, annuity or an ETP.

To determine whether a benefit is excessive, the RBL formula in subsection 140ZA(3) of the ITAA 1936 is used. This formula requires the 'sum of adjusted RBL amounts of previous benefit' to be added to the 'RBL amount of the current benefit' and then the result is measured against the applicable RBL.

A previous benefit is a benefit that was previously received by the recipient. A superannuation pension is taken to have been previously received if the pension's commencement day occurred before the day on which the current benefit was paid or commenced to be paid. The commencement day of a superannuation pension or annuity is defined in section 140C of the ITAA 1936. It is 'the first day of the period to which the first payment of the pension relates'.

As the commencement day of the superannuation pension occurred before the day the ETP is paid, the pension is a previous benefit. The adjusted RBL amount of this pension is therefore taken into account in determining whether the ETP is excess of the recipient's RBLs.

Date of decision: 6 February 2003

Year of income: N/A

Legislative References:
Income Tax Assessment Act 1936
   subsection 27A(1)
   section 140C
   section 140J
   section 140K
   subsection 140R(1)
   subsection 140ZA(3)

Keywords
Reasonable benefit limits
Eligible termination payments
ETP excessive component
Superannuation pensions

Business Line: Superannuation

Date of publication: 14 February 2003

ISSN: 1445-2782

history

	Date:	Version:
	6 February 2003	Original statement
You are here	16 November 2007	Archived

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