SPAA says more to do on excess contributions
The SMSF Professionals' Association of Australia (SPAA) has welcomed the passage of amendments to allow refunding of excess concessional contributions, but says it should extend to non-concessional contributions as well.
After passing the Senate, the amendments will allow taxpayers who have exceeded their concessional contribution cap after 1 July 2013 to withdraw the excess contribution from their superannuation fund.
The excess contribution will be taxed at the taxpayer's marginal rate, with an additional interest charge levied on the excess.
"We have long championed a refunding solutions for excess contributions tax to ensure taxpayers are not treated in a draconian way for accidently breaching their superannuation contribution caps," SPAA chief executive Andrea Slattery said.
The measure will not be limited to excesses of less than $10,000 and will not be limited to a once-off refund, SPAA stated.
"These new rules strikes the right balance between ensuring that taxpayers adhere to the contribution cap while providing adequate penalties for those who breach the concessional contributions cap," she said.
Slattery said the refunding option should also apply to non-concessional contributions, as these usually attract significant amounts of excess contributions tax, and that the interest rate should not apply retrospectively.
"In some circumstances it can reach a 93 per cent tax rate, and the current remedial options available to members who breach their non-concessional cap are grossly inadequate," she said
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