ATO Interpretative Decision

ATO ID 2004/304 (Withdrawn)

Superannuation

Additional contribution to a superannuation pension that has commenced to be paid
FOI status: may be released

This ATO ID is withdrawn from the database because it contains a view in respect of a provision of the Income Tax Assessment Act 1936 that doesn't apply after the 2006-2007 income year. Despite it's withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for income years up to, and including, the 2006-2007 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Can the capital that is backing a superannuation pension or annuity be added to, or topped up, after that pension or annuity commences to be paid?

Decision

No. Additional contributions to the capital backing a superannuation pension or annuity can not be made once a stream of payments commences to be paid.

Facts

The taxpayer is in receipt of an allocated pension from a complying self managed superannuation fund (SMSF).

The taxpayer wishes to make an additional contribution to the SMSF to increase his pension.

The taxpayer is eligible to make the contribution into the SMSF under the minimum standards prescribed in the Superannuation Industry (Supervision) Regulations 1994 (SISR).

Reasons for Decision

For tax purposes a superannuation pension cannot be added to or "topped up".

The original allocated pension must be commuted then rolled over (either via an internal roll over or an external roll over). A new allocated pension may then commence for an increased amount (i.e. that includes both the commutation amount and the additional contribution).

For Reasonable Benefit Limit (RBL) purposes, two RBL reports would be required. One RBL report would be for the commutation and rollover of the original allocated pension; this will result in an RBL reduction to the capital value of the original pension. The second RBL report would be for the commencement of the new allocated pension. The purchase price of the new allocated pension would generally be the amount rolled-over plus the additional contributions.

The annual deductible amount and the minimum and maximum payment limits would also need to be recalculated for the new allocated pension.

Date of decision: 12 March 2004

Year of income: Year ending 30 June 2004

Legislative References:
Income Tax Assessment Act 1936
   subsection 27A(1)
   subsection 27D
   section 140Q
   subsection 140ZP

Superannuation Industry (Supervision) Regulations
Part 7

Related ATO Interpretative Decisions
ATO ID 2002/586
ATO ID 2002/587
ATO ID 2003/808
ATO ID 2004/189

Keywords
Termination payments, superannuation & retirement income
Annuities & superannuation pensions
Allocated Pensions
Undeducted purchase price
Deductible amount
Reasonable Benefit Limits

Business Line: Superannuation

Date of publication: 2 April 2004

ISSN: 1445-2782

history

	Date:	Version:
	12 March 2004	Original statement
You are here	16 April 2010	Archived

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