|
|
|
|
SUPERANNUATION SURCHARGE
From the 1996/97 financial year onwards, superannuation contributions surcharge is payable if a taxpayer's adjusted taxable income for a financial year is greater than the surcharge threshold for the year. The surcharge is imposed on surchargeable contributions and is not a deductible expense. The governing legislation is the Superannuation Contributions Tax Imposition Act 1997 and the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA) and its Regulations. The surcharge is complemented by the termination payments surcharge which is payable on certain employer ETPs made to high income taxpayers in consequence of the termination of employment. LIABILITY TO SURCHARGELiability to superannuation contributions surcharge arises in a financial year if a member's ''adjusted taxable income'' for the financial year is greater than the ''surcharge threshold'' for the year. A ''member'' means a member of a superannuation fund or an ADF, the holder of an RSA or the purchaser of an annuity from a life assurance company or from a registered organisation. The surcharge is payable on all of the member's ''surchargeable contributions'' for the financial year. Although the surcharge is intended to apply to ''high income'' taxpayers, there may also be cases where surcharge liability arises merely because of the failure to quote a TFN. Specific provisions prohibit a superannuation provider from engaging in a scheme with the intention that the scheme would result or be likely to result in the avoidance of the surcharge, including avoidance through the use of allocated surplus amounts. Adjusted taxable income A member's adjusted taxable income for a financial year is the sum of:
If the member is an employee who has a ''reportable fringe benefits total'' for the year of income comprising the financial year, the member's adjusted taxable income will include the reportable fringe benefits total for the year of income. ''Taxable income'' may include not only salary and wages, but also capital gains, rent, dividends (grossed-up for imputation credits), foreign exchange gains, interest, royalties, pensions, compensation payments and numerous other amounts that ''come in'' to the member during the year. Surcharge threshold The surcharge threshold for 1998/99 is $75,856 ($73,220 for 1997/98 and $70,000 for 1996/97). The surcharge threshold amount is indexed annually to movements in AWOTE. Surchargeable contributions The basis for working out a member's surchargeable contributions depends on whether the contributions are held by a superannuation (accumulated benefits) provider or a superannuation (defined benefits) provider. It is irrelevant whether the member is a defined benefit member or a member entitled to accumulated benefits; it is the type of fund or scheme to which the member belongs that determines the calculation of surchargeable contributions. A ''superannuation provider'' means the trustee of a superannuation fund or ADF, an RSA provider, or a life assurance company or registered organisation. Superannuation (accumulated benefits) provider A ''superannuation (accumulated benefits) provider'' is generally the provider of an accumulation fund or a defined contribution fund, ie a fund where the benefit a member receives is the contributions made plus net earnings on those contributions, including a fund in which the only asset is a life assurance policy and which provides death benefits only. Who is liable to pay surcharge? The person who is liable to pay superannuation contributions surcharge varies according to which one of three situations exists. Contributions held by a superannuation provider If a superannuation provider is the holder of the surchargeable contributions when an assessment of the surcharge directed to the provider is made, the provider is liable to pay the surcharge. However, the provider will not be liable to pay the surcharge if, before receiving a copy of the assessment, it ceases to be the holder of surchargeable contributions or begins to pay a pension or annuity based on the contributions. Contributions paid, or pension or annuity starts to be paid, to member If, prior to the surcharge being assessed, the superannuation provider has paid the member an ETP which the member has retained, or commences to pay the member a pension or annuity, the member is liable to pay the surcharge because he/she holds the surchargeable contributions at the time of assessment. Contributions paid, or pension or annuity starts to be paid, to another person No surcharge is payable if, prior to the surcharge being assessed, the superannuation provider has paid the contributions to a person other than another superannuation provider or the member. This situation will generally arise where a death benefit is paid out by a superannuation provider to an estate or dependant upon the death of a member. If a member has died before an assessment, but the benefit is not paid before the assessment, the surcharge is payable by the provider.
|
|
Send mail to webmaster@chotais.com.au with questions or comments about this web site.
|
