Notice of assessment
As previously stated, funds must report member contributions details each financial year. We use this information as well as information from the person's tax return and information from first home saver accounts to determine if the concessional or non-concessional contributions caps have been exceeded.
Section 292-230External Link requires us to make an assessment of the amount of ECT that a person is liable to pay for a financial year. An ECT assessment covers both concessional and non-concessional contributions that exceed their respective caps.
Once we make the assessment, the person must be given a notice in writing as soon as practicable. The notice may be included in a notice of any other assessment made under the ITAA 1997 (including a notice of assessment for ECT).
If an individual disagrees with the calculation of total contributions for their ECT assessment, making an application for discretion to have the contributions disregarded or reallocated is not necessarily the correct first option.
The rectification of any reporting errors should be discussed with the super funds and if the fund does not need to change, or will not change, their reporting, an amendment request or objection can be lodged.
An amendment request should be made on the grounds that the assessment is factually incorrect, for example an amount was incorrectly reported in the person's tax return or the amounts reported by a super fund are incorrect.
If a person receives an assessment and they believe the law has been incorrectly applied, they should lodge an objection to the assessment.
An application for discretion to have contributions disregarded or reallocated should be lodged when the applicant believes there are special circumstances as to why the concessional or non-concessional contributions caps have been exceeded.
An individual seeking to fix ECT problems by amending a super fund's annual return and re-reporting member contributions to allocate amounts to another member, needs to ensure there is a factual basis for re-reporting.
They must be careful not to make a false or misleading statement while attempting to resolve an ECT problem.
We have the power to apply an administrative penalty for false or misleading statements made from 4 June 2010 for an SMSF annual return and member contributions statements.
End of attention
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Under section 292-235External Link, we may issue a part-year assessment and treat the period as if it is a financial year, if justified.
In these cases, we must also make an assessment for the actual financial year as soon as possible after the end of that year unless the assessment would not differ in a material way from the part-year assessment. A part-year assessment does not provide more than one cap for the relevant income year.
Validity of assessment
Under section 292-240External Link, the validity of assessments is not affected through non-compliance with provisions in the ITAA 1997.
Conclusive evidence of ECT assessment
Section 292-250External Link states that the conclusive evidence rules found in section 177External Link of the ITAA 1936 also apply to ECT assessments.
The production of a notice of assessment shall be conclusive evidence of the due making of the assessment and, except in proceedings under Part IVC of the TAA on a review or appeal relating to the assessment, that the amount and all the particulars of the assessment are correct.
Commissioner's power to obtain information
Under section 292-470External Link, the Commissioner has the same powers to obtain information as provided by section 264External Link of the ITAA 1936.
That is, section 292-470External Link allows the Commissioner to request in writing any person to:
- furnish information as is required
- to give evidence
- to produce books and other records.
Super fund reporting obligations
The reporting obligations for super funds, to enable us to make ECT assessments are contained in Division 390External Link of Schedule 1 of the TAA.