Changes to the lifetime non-concessional contribution cap could spell trouble for the tax office’s latest online portal, according to a leading online SMSF services provider.
SUPERCentral says it will prove vital to know a taxpayer’s non-concessional contribution balance if the May 2016 super changes become a reality, however, the ATO’s new NCC balance portal may already be ill-equipped to provide accurate information.
“While the provision of this service is welcome, some issues arise,” SUPERCentral said.
“The balance inquiry is only up to 30 June 2015 and so does not include non-concessional contributions made on or after 1 July 2015 (presumably the ATO is still receiving contribution information for the 2015-16 financial year).”
“Will taxpayers be able to contact the ATO directly for the NCC balance? Possibly, but the issue will be the difficulty of determining the identity of the inquirer to the satisfaction of the ATO for the ATO to release the information,” SUPERCentral said.
Issues regarding the amount of reliance that can be placed on the balance information were also flagged.
“To illustrate the point, assume that the ATO reports that the NCC balance (up to 30 June 2015) of a taxpayer is $75,000. The taxpayer, in reliance on that information, makes a $425,000 non-concessional contribution because the taxpayer knows that the taxpayer has made no non-concessional contributions in the period since 1 July 2015,” SUPERCentral said.
“What are the consequences if the $75,000 figure is incorrect and should have been $200,000? Presumably, the ATO will have to apply the correct figure and treat $225,000 of the $425,000 as excess non-concessional contributions.
“At best the ATO may waive any penalty or interest change due to the reliance on the incorrect information. However, the ATO, in the absence of express statutory authority, disregard the correct balance and apply a different balance.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 08:00Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 08:00Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- view all