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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012718602112

Advice

Subject: Division 293 State higher level office holder

Question

Do you meet the definition of a State higher level office holder (SHLOH) in Regulation 293-145.01 of the Income Tax Assessment Regulations 1997 (ITAR 1997)?

Advice

Yes. Please see 'Reasons for decision' below.

This advice applies for the following period:

2013-14 financial year and future years in which these facts apply.

The arrangement commences on:

1 July 2013

Relevant facts and circumstances

Your advice is based on the facts stated in the description of the scheme that is set out below. If your circumstances are significantly different from these facts, this advice has no effect and you cannot rely on it.

    • We received a letter signed by you requesting a notice advising of your exclusion from Division 293 tax.

    • With your letter, you provided as attachments copies of your:

    • commissions

    • superannuation statements from a constitutionally protected fund (CPF)

    • annual superannuation statement from a commercial superannuation fund

Relevant legislative provisions

Income Tax Assessment Act 1997 section 293-145,

Income Tax Assessment Regulations 1997 regulation 293-145.01 and

Income Tax Assessment Regulations 1997 regulation 995-1.04 .

Reasons for decision

Summary

You meet the definition of a SHLOH as you meet a paragraph of regulation 293-145.01 of the ITAR 1997.

Therefore the modifications for the calculation of Division 293 tax for contributions made to a CPF apply to you for the financial year.

Detailed reasoning

Division 293 tax is not payable on contributions made to a CPF on behalf of SHLOHs with the exception of salary packaged contributions made to the CPF.

CPFs are untaxed super funds that do not pay income tax on contributions or earnings they receive. They are operated by some state governments in Australia for their employees. Under the Australian Constitution, state government assets can't be taxed by the Commonwealth, so different arrangements apply to concessional contributions to CPFs.

The High Court ruled that the Commonwealth could not impose the super contributions (surcharge) under legislation that was enacted in 1997 on contributions to CPFs for SHLOHs.

However, the Commonwealth has the power to impose the Division 293 tax on contributions made to a super interest in a CPF, where those contributions are salary packaged contributions made in respect of constitutionally protected SHLOHs.

The law prescribes that individuals who are considered SHLOHs will be declared by regulations.

The definition of a SHLOH is contained in regulation 293-145.01 of the ITAR 1997 and includes the following:

    • a Minister of the government of a State

    • a member of the staff of a Minister of the government of a State

    • the Governor of a State

    • a member of staff of the Governor of a State

    • a member of the Parliament of a State

    • the Clerk of a house of the Parliament of a State

    • the head of a Department of the Public Service of a State or a statutory office holder of equivalent seniority, including a statutory office holder who is the head of an instrumentality or agency of a State, or

    • a judge, justice or magistrate of the court of a State.

Application to your circumstances

You have an interest in a CPF.

You meet the definition of a SHLOH as you meet a paragraph of regulation 293-145.01 of the
ITAR 1997.

Therefore the modifications for the calculation of Division 293 tax for contributions made to a CPF apply to you for the financial year.

Concessional contributions were made in respect of you to your interest in a CPF in the financial year.

None of these contributions were made as part of a salary packaging arrangement, therefore your modified low tax contributions and consequently your taxable contributions are nil. Therefore no liability arises for Division 293 tax.


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