AMP responds to super contribution tax changes
AMP SMSF has welcomed the new tax rules around excess non-concessional contributions but says a number of outstanding issues are yet to be addressed.
While the new provisions will provide those who have inadvertently breached their non-concessional cap with additional options, AMP SMSF’s head of policy, technical and educational services Peter Burgess told SMSF Adviser there are still issues relating to the way commissioner discretion works.
“Even though we [now] have the refunding rules in place, it’s still in most cases a better outcome for clients to seek discretion and [have] that excess re-allocated or disregarded,” said Mr Burgess.
“They will avoid paying a concessional contribution charge if it’s an excess concessional contribution or having to pay tax on the associated earnings component if it’s a non-concessional.”
Although successfully receiving commissioner discretion will generally result in a better outcome for clients than using the new refund rules, Mr Burgess said this remains difficult to obtain.
“There’s a very narrow interpretation and definition of special circumstance and I think that’s one area that still needs attention,” he said.
Mr Burgess said the new rules will, however, see some improvement in the fairness of the system.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.