Assessment of ECT
We must determine whether a person has exceeded their contributions caps in each income year and, if applicable, raise an assessment for ECT in accordance with section 292-230External Link.
To assess a person's liability to ECT, we use:
- details of contributions received by super funds during the year
- tax return information, if relevant
- information from first home saver accounts
- date of birth.
This assessment is not required to be made by a person or their super fund (or financial institution for first home saver accounts). Their responsibility is to provide information to enable that assessment to be made.
The rate of ECT applied varies with the type of contribution (concessional or non-concessional). If a cap has been exceeded, we will determine the amount of tax payable and issue an ECT notice of assessment for the relevant year.
Before issuing an assessment, a pre-assessment letter will be issued. If the person believes the information used to calculate the assessment is incorrect, they have 28 days to contact the ATO and advise the action being taken to correct the information. Additional time may be given to correct the information before an assessment is raised.
ECT assessments may be amended and the person has review rights.
End of attention
When the assessment is issued, a release authority (voluntary or compulsory) will be sent at the same time. See Collection and recovery and Payment.
An assessment of ECT is made on the basis of what an individual, or their representative acting on their behalf, actually did when making the contribution, rather than what they later say they intended to do. This was reinforced by the Administrative Appeals Tribunal (AAT) when it handed down a decision on 15 March 2011.
In this case, the individual argued before the AAT that his accountant had incorrectly allocated contributions to him that were intended for another member of the fund, however, that individual was not a member of the fund at the time the contribution was made.
The person suggested that he should not be made to pay for what was an innocent mistake made by a third person.
The AAT decision supports the ATO position that the issue of whether excess contributions have been made is a question of fact in the circumstances and the intent of the parties is not determinative.