Decision impact statement
Hamilton v Commissioner of Taxation
Venue: Administrative Appeals Tribunal
Venue Reference No: QS2005/62 & QS2006/24
Judge Name: Justice Downes
Judgment date: 20 August 2007
Appeals on foot:
No.
Impacted Advice
Relevant Rulings/Determinations:
Subject References:
Superannuation
Commonwealth Superannuation Scheme
standard early retirement pension
pension paid out of Consolidated Revenue Fund
undeducted purchase price
entitlement to rebate
 This document is not a public ruling, but provides a statement of the Commissioner's position in relation to the decision and how the law will be administered as a consequence of the decision. Any proposals for changes in the law are matters for government and it is not appropriate for the Commissioner to comment. |
Précis
Whether the applicant who elected to withdraw contributions and interest as a lump sum by commuting his entitlement to a non indexed pension and commenced receiving a CSS indexed pension on retirement is entitled to a rebate of tax and an Undeducted Purchase Price deductible amount in respect to the CSS indexed pension.
Decision Outcome
Favourable
Appeal on foot:
No
Brief summary of facts
1. The applicant had been a contributing member of the Commonwealth Superannuation Scheme ("CSS") and resigned from the Commonwealth Public Service on 28 February 2001.
2. The applicant commenced receiving a CSS indexed pension from ComSuper on 6 March 2001.
3. The applicant elected to withdraw his personal contributions, his employer's productivity contributions and interest as a lump sum by commuting his entitlement to an unindexed pension.
4. The applicant's CSS indexed pension is paid from the Consolidated Revenue Fund ("CRF").
Issues decided by the tribunal
1. Whether the applicant is entitled to a rebate of tax under subsection 159SM(1) of the Income Tax Assessment Act 1936 ("ITAA36") in relation to his CSS indexed pension for the income year ended 30 June 2001? No - Justice Downes found the indexed pension was not 'in effect, funded' from a complying superannuation fund so would not treat it as such under s159ST of the ITAA36 as the applicant had already benefited from an equivalent taxation concession when he received his lump sum.
2. Whether the applicant is entitled to an UPP deductible amount under subsection 27H(2) of the ITAA36 in respect to his CSS indexed pension for the income year ended 30 June 2001? No, as the applicant had received a taxation concession in respect of the whole of the UPP when he elected to commute his unindexed pension to a lump sum, he was not entitled to a UPP in relation to his indexed pension.
Tax Office view of Decision
- •
- Decision aligns with the Commissioner's view that the applicant was not entitled to:
- •
- a rebate of tax as his indexed pension is paid from the CRF and is not 'in effect' funded from a complying superannuation fund; or
- •
- an UPP as the applicant had taken his personal contributions, his employer's productivity contributions and interest as a lump sum.
- •
- Decision is consistent with the taxation treatment of recipients of CCS indexed pensions prior to 1 July 2007
Administrative Treatment
Implications on current Public Rulings & Determinations
Not applicable
Implications on Law Administration Practice Statements
Not applicable
None
Court citation:
[2007] AATA 1677
2007 ATC 2451
67 ATR 235
Legislative References:
Income Tax Assessment Act 1936 (ITAA36)
27A
27AB
27B
27C
27H
159SA
159SJ
159SM
159ST
267
Superannuation Act 1976
17
26
40
45
59
60
61
64
65
110P
112
136
137
138
Superannuation Industry (Supervision) Act 1993
40
45
Case References:
Cooper Brooks (Wollongong) Pty Ltd v FC of T
(1981) 147 CLR 297
81 ATC 4292
11 ATR 949
Harris v C of T
(2002) 125 FCR 46
2002 ATC 4659
50 ATR 410
Investment Trust v Commissioner of Stamps (SA)
(1979) 145 CLR 330
79 ATC 4429
10 ATR 97
Project Blue Sky Incorporated v Australian Broadcasting Authority
(1998) 194 CLR 355
Austin v Commonwealth of Australia
(2003) 215 CLR 185
2003 ATC 4042
51 ATR 654