Gov’t to effectively get rid of super excess contributions tax
In the May Budget, the government stated it will introduce legislation to ensure that inadvertent breaches of the non-concessional contributions cap, that are reversed, will not incur a penalty.
For any excess contributions made after 1 July 2013 that breach the non-concessional cap (currently $150,000), individuals will be allowed to withdraw those excess contributions and associated earnings.
If a taxpayer chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual’s marginal tax rate.
Anyone who leaves their excess contributions in the fund will continue to be taxed on these contributions at the top marginal rate.