The Budget did, however, contain a positive announcement with regards to excess superannuation contributions tax. For any excess superannuation contributions made after 1 July 2013 that breach the non-concessional cap, the Government will now allow people to withdraw those excess contributions and associated earnings. This will mean no excess contributions tax will be payable and any related earnings will be taxed at the individual's marginal tax rate.
The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws so that inadvertent breaches of the caps are not unfairly penalised. The previous government went some way to addressing the problems, and now this week’s Budget announcement addresses the issues with the non-concessional contributions cap as well.
As always, the devil will be in the detail and we look forward to consulting with the Government on the exact nature of the legislative changes.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.