![\"\"](\"https:\/\/acctweb.com.au\/images\/divorce.jpg\")
<\/p>\nThe Administrative Appeals Tribunal (AAT) has upheld an ATO decision to impose an excess contributions penalty and rejected a taxpayer\u2019s claim a divorce-related superannuation split constituted special circumstances under taxation law.<\/p>\n
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The case involved a taxpayer, BVZH, who went through a divorce that resulted in a split of his total superannuation balance of $1,820,792 with his former wife, with the majority of the funds held in the Commonwealth Superannuation Scheme and an SMSF.<\/p>\n
The taxpayer\u2019s superannuation balance dropped by $427,497 as a result of transferring an amount from the proceedings, bringing his total super balance to about $1.39 million in 2020.<\/p>\n
In June 2020, believing his reduced balance allowed him to make a non-concessional contribution, BVZH deposited $100,000 into his SMSF. He later admitted to making this contribution as an \u201chonest mistake\u201d and had not sought legal or accounting advice before making it.<\/p>\n
The ATO issued a determination and imposed an excess contribution penalty of $47,000 because his non-concessional contributions cap was determined to be nil as his balance exceeded the $1.6 million general transfer balance cap at the start of the financial year.<\/p>\n
BVZH contested the decision and argued the circumstances of his divorce and superannuation split constituted special circumstances under section 292-465 of the\u00a0Income Tax Assessment Act<\/em>\u00a0(ITAA<\/em>)\u00a01997<\/em>, which would allow his contribution to be reallocated or disregarded.<\/p>\n However, the regulator rejected the taxpayer\u2019s argument, stating divorce and superannuation splits were common occurrences and do not qualify as special circumstances under the section of the\u00a0ITAA<\/em>\u00a0referenced by BVZH.<\/p>\n Dissatisfied with the result, he took the matter to the AAT to challenge the ATO\u2019s decision, with the tribunal dismissing the taxpayer\u2019s claim and agreeing with the regulator that a reduction in a superannuation balance as a result of divorce did not meet the legal definition of special circumstances set out in the\u00a0ITAA<\/em>.<\/p>\n \u201cQuite clearly, as he contended, had he made the non-concessional contribution of $100,000 in the subsequent financial year, the non-concessional contributions for that year would not have been exceeded,\u201d AAT senior member Robert Cameron stated.<\/p>\n \u201cAs has been observed, the cases where special circumstances have been found for the purposes of Division 292, and therefore the discretion enlivened, are very few indeed.<\/p>\n \u201cA feature of most of the cases where special circumstances have been found to have arisen are due to the taxpayer being actively misled or otherwise acting under a misapprehension as to particular circumstances which have been caused or induced by acts or omissions of others.<\/p>\n \u201cIn this case the predicament that the applicant finds himself in was solely due to his failure to understand the application and effect of section 292-85(2) of the\u00a0ITAA<\/em>.\u201d<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n October 22, 2024 The Administrative Appeals Tribunal (AAT) has upheld an ATO decision to impose an excess contributions penalty and rejected a taxpayer\u2019s claim a divorce-related superannuation split constituted special circumstances under taxation law.<\/p>\n","protected":false},"author":1,"featured_media":2031,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2030"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=2030"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2030\/revisions"}],"predecessor-version":[{"id":2032,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2030\/revisions\/2032"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/2031"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=2030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=2030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=2030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nTodd Wills
\nsmsmagazine.com.au<\/p>\n","protected":false},"excerpt":{"rendered":"