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Subject: Excess contributions tax - CGT small business concession
Question
Can a choice in subsection 292-100(9) of the Income Tax Assessment Act 1997 (ITAA 1997) be made after the contribution has been made?
Advice
No
This advice applies for the following period:
Income year ended 30 June 2010
The arrangement commenced on:
During the income year ended 30 June 2010
Relevant facts and circumstances
During the 2010 income year, you sold an asset and rolled the proceeds from the sale into a superannuation fund (the Fund) under the Small Business Retirement Tax Legislation.
At the time of the roll-over you were not aware that a Capital Gains Tax Cap Election Form NAT71161 (the approved form) needed to be lodged with the Fund. As a result, the roll-over has been treated as non-concessional contributions in Fund.
You state that your accountant has been advised by the ATO that the Fund needs to amend their records with regard to the nature of the roll-over, however, the Fund refuses to amend their records without a written advice from the ATO.
You require a ruling as to whether you can complete a Capital Gains Tax Cap Election Form NAT71161 form now and lodge it with the Fund.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 292-100
Income Tax Assessment Act 1997 Subsection 292-100(1)
Income Tax Assessment Act 1997 Subsection 292-100(2)
Income Tax Assessment Act 1997 Subsection 292-100(9)
Reasons for decision
Summary
In accordance with subsection 292-100(9) of the ITAA 1997, a contribution will be covered by section 292-100 of the ITAA 1997 if a choice to apply that section is made on or before the time the contribution is made.
Section 292-100 of the ITAA 1997 does not provide the Commissioner of Taxation with discretion to allow for a choice under subsection 292-100(9) of the ITAA 1997 to be made at a later time, that is, after the contribution has been made. Therefore, a choice under subsection 292-100(9) cannot be made after the contribution has been made.
Detailed reasoning
Subsection 292-90(1) of the ITAA 1997 states that the amount of a person's non-concessional contributions for a financial year is the sum of:
(a) each contribution covered under subsection (2); and
(aa) each amount covered under subsection (4); and
(b) the amount of your excess concessional contributions (if any) for the financial year.
As far as relevant, subsection 292-90(2) provides that a contribution is covered under that section if:
(a) it is made in the financial year to a complying superannuation plan in respect of you; and
(b) it is not included in the assessable income of the superannuation provider in relation to the superannuation plan, or, by way of a roll-over superannuation benefit, in the assessable income of any complying superannuation fund or RSA provider in the circumstances mentioned in subsection 290-170(5) (about successor funds); and
(c) it is not any of the following …
iii) a contribution covered under section 292-100 (certain CGT-related payments), to the extent that it does not exceed your CGT cap amount when it is made;
A contribution is covered under section 292-100 of the ITAA 1997 if the contribution is made to a complying superannuation fund in respect of you in a financial year, certain requirements are met and you choose, in accordance with subsection 292-100(9) to apply that section to an amount that is all or in part of the contribution.
Subsection 292-100(9) of the ITAA 1997 requires that the choice be made in the approved form and that the form be given to the superannuation provider on or before the time the contribution is made.
Section 292-100 of the ITAA 1997 does not provide the Commissioner of Taxation with discretion to allow for a choice under subsection 292-100(9) of the ITAA 1997 to be made at a later time, that is, after the contribution has been made. Therefore, a choice under subsection 292-100(9) cannot be made after the contribution has been made.
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