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Edited version of administratively binding advice
Authorisation Number: 1012459189581
Subject: Excess contributions tax
Questions
Can you make a contribution with the proceeds from the sale of your business to your self-managed superannuation fund?
Advice/Answers
No.
This ruling applies for the following period
Year ending 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts and circumstances
You are currently over 75 years of age.
You wish to sell your business and roll over the proceeds to your self-managed superannuation fund.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 292-100
Superannuation Industry (Supervision) Act 1993
Superannuation Industry (Supervision) Regulations 1994 Subregulation 7.04(1)
Further issues for you to consider
Does Part IVA apply to this ruling?
Reasons for decision
Summary
As you are over 75 years of age and the contribution is from the sale of your business, which are not mandated employer contributions, your self-managed superannuation fund will not be able to accept the contribution.
Detailed reasoning
If an individual made a capital gain from a CGT event (such as the disposal of a CGT asset) they may be able to reduce the capital gain using either or both of the following:
· the CGT discount
· one or more of the four CGT concessions available for small business
Section 292-100 of the Income Tax Assessment Act 1997 (ITAA 1997) covers certain superannuation contributions relating to some CGT small business concessions. However, one must first consider whether a superannuation fund may accept the contributions.
Whether a regulated superannuation fund is able to accept contributions is determined under the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations).
Under the SIS Act, regulation 7.04 of the SIS Regulations, sets out the circumstances under which a regulated superannuation fund can accept contributions for a member.
Subregulation 7.04(1) states:
A regulated superannuation fund may accept contributions only in accordance with the following table and subregulations (2), (3), (4) and (6).
Please note, for a member not under 75, Item 4 of the table states that a superannuation fund may only accept mandated employer contributions.
In this case, as you are over 75 years of age and the contribution is from the sale of your business, which are not mandated employer contributions, your self-managed superannuation fund will not be able to accept the contribution.