Interesting read for Salary Sacrifice people "For the past three years, SuperGuide has been highlighting the tax problems associated with the halving of the contributions caps (taking effect from July 2009), in particular, we have continuously squawked about the ridiculous, daft, and heinous excess contributions tax regime. The unfair application of a flawed penalty regime for excess contributions has meant innocent, law-abiding Australians trying to plan for their retirement are being hit with massive tax bills, often in the tens of thousands of dollars." Link
I inadvertently did not reduce the 50 k back to 25k in 2009/10 and the ATO only assessed for the additional tax at the higher marginal rate over the 15% contribution tax.They charged no penalty at all and simply deducted it from my refund in the 2010/11 assessment with no interest either . I did not like the 7K deduction however I was pleased they didn't hammer me. Definately something to be careful about though. An interesting side note is that when you turn 50 in any year of assessment the allowable cap contribution is based on your age as at the 30 th of June of that year with no proration of the contribution. That is ..if you turn 50 on the 29 th June you can still go the 50 k in for that financial year.
You must have a guardian angel looking over you because the ATO claims not to have discretionary powers when you go over the cap and the records show they have screwed thousands with their sledge hammer. The normal is they take 93% of the excess contribution Kind Regards non recourse
Not true .The ATO will also allow an application to be made within the prescribed time frame for the make up tax to be paid by your super fund rather than you personally pay the tax. I elected to not have the fund pay and cop the tax off my refund. There are alot of urban myths floating around on this topic. If you are speaking from personal experience on the excess contributions tax as I am then you may need to review who is advising you on your tax matters?
I'll start by saying my advisor is me, myself and I :lol: The 93% tax rate pertains to the non concessional component; It should also be noted that amounts in excess of the concessional contributions cap count towards the non-concessional cap - leading to the possibility of a 93 per cent tax rate in situations where very large excess contributions are made. THIS IS NOT AN URBAN MYTH, BUT RATHER LEGISLATIVE THEFT OF YOUR AFTER TAX DOLLARS I have not experienced this because I control my super contributions not some faceless employee. When you consider Kawa the obscene super entitlements our elected representitives and the upper echelons of the civil service get; you should be red with rage that these bastards are stealing the life blood of your retirement corpus. Read and weep http://www.moneymanagement.com.au/s...de-to-the-new-excess-contributions-tax-regime Kind Regards non recourse