The Minister for Revenue and Assistant Treasurer, Peter Dutton, today announced a transitional integrity measure to support the Simplified Superannuation reforms.
“The Simplified Superannuation reforms ensure that superannuation taxation concessions are targeted appropriately by limiting the amount of superannuation contributions a person can make or receive.”
“The Government will amend the Income Tax (Transitional Provisions) Act 1997 to address an issue that could threaten the integrity of the contribution caps if it is not addressed,” Peter Dutton said.
Contributions made by a person on behalf of another person, but which are not Government co-contributions or contributions made on behalf of a spouse, child or employee (for example, those made by a friend) are taxed in the hands of a superannuation fund, generally at 15 per cent. However such contributions are not included in any cap during the transitional period of 10 May 2006 to 30 June 2007.
The Treasurer’s Press Release No. 131 of 7 December 2006 indicated that the Government would act to address any avoidance activities that are undertaken in Simplified Superannuation, with the date of effect backdated to 7 December 2006. This issue, if not addressed, could have resulted in people circumventing the contribution caps by giving large amounts of money to another person to contribute to a superannuation fund on their behalf prior to 1 July 2007.
The amendment will ensure these contributions made between 7 December 2006 and 30 June 2007 are included in the $1 million cap on non‑concessional contributions.
“This amendment is only likely to affect those who were attempting to intentionally circumvent the caps on contributions to superannuation,” Peter Dutton said.
This measure will be included in the Taxation Laws Amendment Bill (No.3) 2007, scheduled for introduction and passage through Parliament in the Winter sittings.