Superannuation Alert - 14.03.13

Financial Services eBulletin - 14 March 2013

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry and is in addition to our Superannuation Update, which analyses the main developments of interest in more detail.

  • On 28 February 2013, in two separate cases, the Administrative Appeals Tribunal (AAT) upheld a decision of the Commissioner of Taxation (Commissioner) to refuse to exercise its discretion to disregard excess superannuation contributions under applications made pursuant to section 292-465 of the Income Tax Assessment Act 1997
     
    • In Confidential and Commissioner of Taxation AATA 110, the taxpayer made large contributions to a superannuation fund and claimed to have given the trustee a notice to the effect that she intended to claim a tax deduction for $32,135.85 of the total contributions. The notice was not received by the fund, so these contributions were treated as non-concessional, with the result that the non-concessional contribution cap was exceeded (although the taxpayer's intention was to have them classified as concessional). The AAT found that the circumstances did not produce an unusual or out of the ordinary outcome. The AAT concluded by stating that: "What the Applicant seeks is exercise of a discretion to relieve her from the burden of taxation liability incurred through ignorance of the applicable rules. This is not a case where discretion ought be exercised."
       
    • Similarly, in Confidential and Commissioner of Taxation AATA 111 the taxpayer made large contributions to a superannuation fund with the intention of claiming a tax deduction for a portion of the contributions. As for the previous case, the notice required in order to claim a tax deduction was not received by the fund, so all the contributions were treated as non-concessional, with the result that the non-concessional contribution cap was exceeded. The contributions were made on the basis of advice received by the taxpayer. The AAT again found that the circumstances did not produce an unusual or out of the ordinary outcome. The AAT concluded by stating that: "…this liability arose as the product of advice given by an advisory organisation which has failed the Applicant. This is not a case where discretion ought be exercised."
       
  • On 4 March 2013, ASIC released Regulatory Guide 246 Conflicted remuneration (RG 246) which provides guidance on the operation of the ban on conflicted remuneration as part of the Future of Financial Advice (FOFA) reforms. The ban "applies to both personal and general advice given to retail clients about any financial product, including managed investments, superannuation and platforms".
     
  • On 5 March 2013, ASIC amended Regulatory Guide 245 – Fee disclosure statements (RG 245) to clarify circumstances where it will not take enforcement action against a fee recipient for failing to provide the Fee Disclosure Statement to an existing client within the 30 day requirement for ongoing fee arrangements.

In team news, we are delighted to welcome Terry Brigden to our Financial Services team in Sydney. Terry, who will already be well known to many of our clients, has specialist expertise in financial services, and is particularly well recognised for his work in relation to life and general insurance, reinsurance and superannuation. He is also on the International Monetary Fund’s external expert panel for banking and insurance regulation, most recently consulting to the Central Bank of Bangladesh on amendments to its Banking Companies Act. Terry will work closely with Ruth Stringer to further develop and consolidate our financial services offering in the Sydney market.

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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