Jones and Commissioner of Taxation (Taxation)
[2022] AATA 4382
•16 December 2022
Jones and Commissioner of Taxation (Taxation) [2022] AATA 4382 (16 December 2022)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2021/1830, 2021/7119, 2021/2212 and 2021/2211
Re:Gareth Jones
APPLICANT
AndCommissioner of Taxation
RESPONDENT
Decision
Tribunal:Senior Member O'Donovan
Date:16 December 2022
Place:Canberra
The Tribunal affirms the reviewable decisions
.......................[SGD].................................................
Senior Member O'Donovan
Catchwords
TAXATION – Income Tax – objections to tax assessments – payment of invalidity payments in accordance with the Military Superannuation and Benefits Trust Deed - Whether payments should be taxed as a superannuation income stream benefit – Whether payments were to be taxed as a superannuation lump sum – Whether an election was made in the relevant periods – Applicant’s taxation objections misconceived – objections decisions affirmed
Legislation
Military Superannuation and Benefits Act 1991
Taxation Administration Act 1953
Income Tax Assessment Act 1997
Income Tax Assessment Act 1936
Tax Laws Amendment (Simplified Superannuation) Act 2007Superannuation Industry Supervision Act 1993
Cases
Federal Commissioner of Taxation v Douglas [2020] FCAFC 220
Secondary Materials
Income Tax Assessment Amendment (Superannuation Measures No 1) Regulation 2013
Income Tax Assessment Regulations 1997
Superannuation Industry (Supervision) Regulation
Treasury Laws Amendment (Miscellaneous amendments) Regulations 2018REASONS FOR DECISION
Senior Member O'Donovan
16 December 2022
The applicant was a member of the Australian Defence Force. In August 1997 he was discharged due to invalidity. The applicant has been in receipt of a fortnightly invalidity payment at varying rates since 1 September 1997. The payment is made under the Military Superannuation and Benefits Trust Deed (MSB Trust Deed) under the scheme established by the Military Superannuation and Benefits Act 1991 (Cth) (MSB Act).
A dispute has arisen as to whether the applicant was taxed correctly between 30 June 1997 and the present.[1] As different issues arise in relation to different periods of assessment, it is convenient to divide them into categories where similar issues arise. For reasons which will be explained in the body of this decision, it is convenient to utilise the following income year groupings:
(a) 30 June 1997;
(b) 30 June 1998 to 30 June 2007;
(c) 30 June 2008 to 30 June 2014;
(d) 30 June 2015 to 30 June 2016;
(e) 30 June 2017;
(f) 30 June 2018 to 30 June 2020.
[1] ST6 p 35.
The applicant disagreed with all of the assessments made by the Commissioner in these years. Notices of objection were submitted on 7 April 2020 covering the income years 1997 through to 2018.[2] On 18 November 2020 the applicant submitted an objection in relation to income year 2019/2020.[3]
[2] T8.
[3] T9.
The taxation objections filed originally by the applicant are all in identical terms:
My invalidity payment from the Commonwealth Superannuation Corporation has been taxed as a superannuation income stream. I submit that the payment is a superannuation lump sum and should be taxed in accordance with s 307-145 of the Income Tax Assessment Act 1997 (ITAA).
The notices of objection filed by the applicant also reference ancillary objections which are referenced throughout the applicant’s objection forms which are in the following terms.
The payment does meet the definition of a superannuation income stream in accordance with the ITAA.[4]
[4] See for example T8 – p 165.
In light of the position taken by the applicant in these proceedings, I have proceeded on the basis that there is a ‘not’ missing from this sentence between the words ‘does’ and ‘meet’.[5]
[5] It appears to have been written correctly at T9 – p 17.
On 19 March 2021 the respondent made a decision in relation to the applicant’s objections. The respondent refused to allow an extension of time to object in relation to years ended 30 June 1998 to 30 June 2017, and decided not to allow the applicant’s objection for the years ended 30 June 2018 to 30 June 2020.
On 29 March 2021, the applicant applied to the Tribunal for review of those decisions.
A section 42C consent decision was made by the Tribunal which granted an extension of time in relation to the years 1998 through to 2017.[6] The application for review of the decision in relation to the 2018 to 2020 income years remained on foot in the Tribunal.
[6] I note that the original decision erroneously records the decision as covering up to the 2019 year, but this is clearly a transcription error made between the request being made and the decision being issued. A corrigendum will issue with this decision.
A further notice of objection was lodged by the applicant with the ATO[7], which on its face contests every notice of assessment which the applicant has received since 30 June 1997.[8]
[7] ST 6.
[8] ST – 6 p 35 and 42.
The document attached to that objection states the grounds of objection and reads as follows:
The provision for the election of having my Superannuation Disability Benefit taxed as a Lump Sum Benefit was put into Taxation Law (Legislation) ITAA 1997 which commenced on 1st July 1997, this commenced some 2 months prior to my Medical Discharge from the Australian Defense (sic) Force (Army) (ADF) and goes with the letters supplied to Commonwealth Superannuation Corporation (CSC) back in July 1998.
Once I was made aware that I could have my Disability Benefit taxed as a Lump Sum Benefit I applied for a Private Ruling….I received a private ruling (Determination) Dated 8th February 2016, (4 years after the application), that my disability benefit was to be taxed as a Lump Sum Disability Benefit…Paragraph 54 of my private ruling states that I have satisfied the Disability Superannuation Benefit definition. Paragraph 57 of my Private Ruling states that I have met the definition of a superannuation lump sum benefit under section 307-145 of the ITAA 1997 and this will apply to my Disability Lump Benefit for taxation paid by CSC. It is noted that this section of the ITAA 1997 was repealed on 1st July 2007. After receiving my Private Ruling, I applied for some years of backdated taxation to be granted to me this was ultimately denied by the ATO for the years 2015 and 2016.
My benefit started on 1/9/1997 and has been paid continually since that date to present, it fell under the ITAA 1997 Legislation and now it falls outside of the dates in SIS Reg 1.06(1A)(b) which states “Where the primary beneficiary became ENTITLED to the benefit on or after 20 Sep 1998 under the rules of a superannuation fund that meet the standards.” And therefore must be considered as a Disability Lump Sum Benefit under the judgement handed down by the Federal Court and as stated in my Private Ruling.
It is worth pointing out at this juncture that the grounds of objection, in their initial form and as elaborated, reveal fundamental misconceptions on the part of the applicant about the legislative provisions which applied at various times. No provisions of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) dealt with the applicant’s superannuation benefits when he retired in 1997. Contrary to what the applicant contends in his notice of objection, section 307-145 of the ITAA 1997 was not repealed in 2007. Indeed the section was inserted in the ITAA 1997 for the first time in 2007.
The respondent made a decision in relation to the objections on 17 September 2021.
The respondent did not allow the objections to the assessments in respect of the years 1998 to 2014.[9] The objection to assessments for the years ending 30 June 2015 and 30 June 2016 were found to be invalid as those years had already been the subject of objection decisions.[10] The objection to the assessment for the year ending 30 June 2017 was found to be invalid because it was a negative assessment against which the applicant had no right to object.[11] On 25 September 2021, the Applicant lodged with the Tribunal an Application for review of the objection decision dated 17 September 2021.
[9] ST2 - 12.
[10] ST9 – 52.
[11] ST9 – 52.
The Tribunal’s jurisdiction in relation to the objections concerning income years 2018 to 2020 remained as a consequence of the earlier application.
The Tribunal’s task in reviewing a reviewable objection decision is set out in section 14ZZK of the Taxation Administration Act 1953 (Administration Act):
On an application for review of a reviewable objection decision:
(a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds
stated in the taxation objection to which the decision relates; and
(b) the applicant has the burden of proving:
(i) if the taxation decision concerned is an assessment—that the assessment is excessive or otherwise incorrect and what the assessment should have been;
or
(ii) in any other case—that the taxation decision concerned
should not have been made or should have been made differently.
The taxation decisions which the applicant is concerned about are in each case an assessment. No leave has been sought by the applicant or been given by the Tribunal to extend the grounds of objection beyond those stated in the taxation objections submitted by the applicant.
The applicant’s case
The applicant’s grounds of objection put his case in the following way. I set out the grounds as put and discuss the specific problems with the way in which the argument is pressed later on:
·The provision for the applicant to elect to have his superannuation disability benefit taxed as a lump sum benefit was put into the ITAA 1997 which commenced on 1 July 1997, 2 months prior to his medical discharge;[12]
·When he was made aware that he could have his disability benefit taxed as a lump sum benefit, the applicant applied for private ruling number 1013073976945 and received a private ruling on 8 February 2016 which concluded (at paragraph 57) that his disability benefit was to be taxed as a lump sum because the payments met the definition of a superannuation lump sum under section 307-145 of the ITAA 1997;
·Section 307-145 of the ITAA 1997 was repealed on 1 July 2007;[13]
·The applicant applied for backdated taxation treatment to be granted – this was denied by the ATO for the years 2015 and 2016;
·Because his benefit started on 1 September 1997 and has been paid continually since then, it is not caught by Superannuation Industry (Supervision) Regulation 1.06(1A)(b) and therefore must be considered as a disability lump sum benefit (as considered in the judgment handed down by the Federal Court (which appears to be a reference to Federal Commissioner of Taxation v Douglas [2020] FCAFC 220 (Douglas)). In particular, until the inclusion of reg 1.06(1A) all benefits of the kind received by the applicant should be treated as a lump sum. Like Mr Douglas, the applicant says he was entitled to the lower taxation back to the date he received the benefit. The applicant’s circumstances were unlike Mr Burns’ circumstances (whose taxation position is also discussed in the Douglas decision and found not to result in the taxation of the benefit as a lump sum), so the basis on which Mr Burns was unsuccessful in that case is inapplicable;
·The applicant should have his disability benefit taxed as a lump sum and notices of assessment should be re-issued from 1998 to 2020;
·The disability benefit he receives should be re-classified as a disability lump sum benefit.[14]
[12] ST6 – 38.
[13] ST6 – 39.
[14] ST-6.
Why this argument fails differs depending on which assessment is under consideration. Accordingly, it is convenient to go through the income tax assessments sequentially.
1997 Objection
The applicant’s objection to the assessment for the year ending 30 June 1997 is hopeless. The only ground of objection which the applicant has raised is that his benefit under the MSB Act should have been taxed as a lump sum. As the applicant did not begin receiving an MSB Act benefit until September 1997, the ground of objection advanced is misconceived for the income year ending 30 June 1997.
1998-2007 objections
The objections for the notices of assessment covering 30 June 1998 and 30 June 2007 are also hopeless.
They are premised on the proposition that because the ITAA 1997 commenced on 1 July 1997, the applicant’s fortnightly payments should be taxed as a ‘superannuation lump sum’[15] under section 307-145 of the ITAA 1997 from the time the payment of the benefit commenced.
[15] A superannuation lump sum is defined in subsection 307-65(1) as follows: A superannuation lump sum is a superannuation benefit that is not a superannuation income stream benefit.
The difficulty with this proposition is that until 1 July 2007, the taxation of superannuation payments was governed by the Income Tax Assessment Act 1936 (ITAA 1936). In the pre-2008 financial years the applicant’s fortnightly payments were taxed as a ‘superannuation pension’ as defined in section 27A(1) of the ITAA 1936. It was impossible for his benefits to be taxed in accordance with section 307-145 of the ITAA 1997 because the provision did not exist.
The applicant’s mistake appears to arise from his failure to appreciate that although the ITAA 1997 commenced on 1 July 1997 the relevant provisions with which he is concerned were added a decade later. Consequently, the applicant has wrongly assumed that his fortnightly payments were governed by the provisions of that 1997 Act when payment commenced in September 1997. In fact, the concessional superannuation provisions were moved from the ITAA 1936 to the ITAA 1997 from 1 July 2007 when section 307-145 was inserted into the ITAA 1997 for the first time. From 1 July 2007 Division 301 of the ITAA 1997 governed the taxation of superannuation member benefits.[16] The relevant explanatory memorandum explains what occurred.
The provisions dealing with the taxation of superannuation in the Income Tax Assessment Act 1936 (ITAA 1936) are being rewritten and consolidated into the ITAA 1997. This rewrite provides a clearer picture of the taxation treatment of superannuation savings across the life of the superannuation investment: when the money is contributed; during the investment phase; and at the benefit payment phase, and provides a consistent style.[17]
[16] Tax Laws Amendment (Simplified Superannuation) Act 2007 No. 9, 2007.
[17] Explanatory memorandum for the Tax Laws Amendment (Simplified Superannuation) Bill 2007.
Consequently, the grounds advanced in the applicant’s notices of objection for this period cannot succeed. He simply misunderstands which taxation regime applied to his benefit. His benefit was not taxed as a superannuation income stream benefit because it was subject to a quite different taxation regime.
While there was some argument at the hearing (and in the respondent’s submissions) about how the earlier regime operated, it is not necessary to deal with those arguments. The applicant’s objection proceeded on the basis that he should have been taxed under the ITAA 1997 from the time he began to receive his pension. That position is misconceived. Pursuant to 14ZZK of the ITAA 1997 the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates.
The Tribunal has not ordered otherwise in this case and no application for such an order was made. The argument advanced in the objection notice proceeds on a fundamental misunderstanding and cannot succeed.
2008 – 2014 assessments
The applicant’s contention that his invalidity payment should be taxed pursuant to section 307-145 is more arguable in relation to income years which fall after the provision was inserted into the ITAA 1997.
Section 307-145 provides the following starting point for the relevant tax calculation:
(1)Work out the tax free component of the superannuation benefit under subsection (2) if the benefit is a superannuation lump sum and a disability superannuation benefit.
The effect of this subsection is that section 307-145 is only used in the calculation of the tax treatment of a payment if it is both:
(a)a disability superannuation benefit; and
(b)the benefit is a superannuation lump sum.
The respondent accepts that the applicant’s invalidity payment is a ‘disability superannuation benefit’. The applicant has a tax ruling to that effect.[18]
[18] ST3-19
The nub of the dispute is whether the applicant’s benefit is a ‘superannuation lump sum’. The applicant is of the view that it is. He appears to believe that the respondent conceded as much in paragraph 57 of his tax ruling.[19] However, that is not the case. The tax ruling states at paragraph 57:
As you have satisfied the disability superannuation benefit definition based on the facts provided, if any of the superannuation benefits are received by you as a superannuation lump sum benefit, section 307-145 of the ITAA 1997 will apply to effectively increase the tax-free component of the lump sum in accordance with the following formula…(emphasis added).
[19] ST6 - 39
It then goes on to say:
In other words, as you are under your preservation age of 57, the tax treatment of the pension payments that you elect to have taxed as superannuation lump sums will be as follows…
The ruling then goes on to outline the concessional way that the payment will be treated if the applicant has elected to have his payment taxed as a lump sum.[20] The ruling reflected the law as it was at that time. If the applicant had elected to have his payments treated as a lump sum, he would have been entitled to concessional tax treatment.
[20] ST3 - 29
To understand why that is so it is necessary to step through each element of the statutory regime.
Section 307-65(1) of the ITAA 1997 provides that:
A superannuation lump sum is a superannuation benefit that is not a superannuation income stream benefit.In other words, if a superannuation benefit falls within the meaning of the phrase ‘superannuation income stream benefit’, then it cannot, by definition be a superannuation lump sum. The corollary is that only benefits which fall within the meaning of ‘superannuation income stream benefit’ are excluded from being a superannuation lump sum. Accordingly, the critical question determining the tax treatment of the payment is whether it is a superannuation income stream benefit.
Does the applicant’s benefit fall within the definition of a superannuation income stream benefit?
Subsection 307-70(1) of the ITAA 1997 defines a ‘superannuation income stream benefit’ as:
…a superannuation benefit specified in the regulations that is paid from a superannuation income stream.
There are two elements to this definition. First, the relevant superannuation benefit must have been specified in the regulations. Second, the benefit must have been paid from a superannuation income stream.
Was the applicant’s superannuation benefit specified?
In 2016 when the applicant received his private binding ruling, the question of whether his benefit was ‘specified’ in the ITAR 1997 was a question of genuine controversy.[21]
[21] It was subsequently resolved that it was specified, in the Full Court’s decision in Douglas.
At that time, the ITAR 1997 provided the following definition in regulation 995-1.01:
superannuation income stream benefit:
(a) means a payment from an interest that supports a superannuation income stream other than a payment to which regulation 995-1.03 applies [emphasis added].
In Douglas, the Full Federal Court found that the inclusion of this definition in the regulations meant that MSB Benefits (which were payments from an interest that supports a superannuation income stream) were ‘specified in the regulations’ for the purposes of subsection 307-70(1). However, the inquiry doesn’t end there.
Given the wording of the definition, if regulation 995.103 applied to a payment, the benefit was excluded from specification.
Regulation 995.103 at that time provided as follows:
A payment from an interest that supports a superannuation income stream is not a superannuation income stream benefit if:
(a)The conditions to which the superannuation income stream is subject allow for the variation of the amount of the payments of benefit in a year…
(b)The person to whom the payment is made elects, before a particular payment is made, that that payment is not to be treated as a superannuation income stream benefit.
In other words, if two elements are present the payment will not have been specified and can be treated as a lump sum. First the benefit payments must be variable (which in the MSB they are). Second, the person to whom the payment is made must elect to have it treated as a lump sum. Whether Mr Jones made such an election is a contested question in this case.
In my assessment, there is no evidence before me which suggests that the applicant ever made such an election. The applicant filed an affidavit dated 16 June 2022 which set out his belief that he had made such an election at the point of his discharge from the military in 1997 by the provision of forms signed by his doctors. The form annexed however provides no evidence of an election for the purposes of regulation 995-1.03. Further, the applicant freely conceded that a thorough search of his house and his superannuation file had not unearthed any other document that could constitute such an election.[22] When these facts are considered in a context where the legal necessity to make such an election did not arise until 2007 when the regulation was introduced, I am not satisfied that the applicant ever made an election which would take the benefits he was receiving (in the period 2007-2014 period) outside of the specification in regulation 995-1.01.[23]
[22] Affidavit of Gareth Jones dated 16 June 2022 at paragraph [6]
[23] The adequacy of the specification was the subject of consideration by the Full Court of the Federal Court in FCT v Douglas [2020] FCAFC 220. The Court determined that the defining of the phrase amounted to specification for the purposes of section 307-70(1).
Accordingly, I am satisfied that the payments made to the applicant satisfied the first part of the definition of a superannuation income stream benefit, in that the benefit he receives was specified in the regulations. Therefore, if the applicant is to have his benefit characterised as a superannuation lump sum, it must not be paid from a superannuation income stream.
The definition of a ‘superannuation income stream’ is found in sub-regulation 995-1.01(1) of the former ITAR 1997.[24] The definition had a number of distinct paragraphs. If the conditions of any one of the paragraphs are met, then a payment is a ‘superannuation income stream’.
[24] See 307-70(2) ITAA 1997.
The regulation has at all relevant times provided as follows:
superannuation income stream means:
(a) …
(b) an income stream that:
(i) is an annuity or pension within the meaning of the SIS Act; and
(ii) commenced before 20 September 2007; or...
For reasons which follow I am satisfied that the applicant’s benefit falls within paragraph (b) in that it is ‘an income stream that … is … a pension within the meaning of the Superannuation Industry Supervision Act 1993 (SIS Act) and it commenced before 20 September 2007.
‘Pension’ is defined in the SIS Act in the following terms:
pension, except in the expression old-age pension, includes a benefit provided by a fund, if the benefit is taken, under the regulations, to be a pension for the purposes of this Act.
The definition is inclusive rather than prescriptive. As the respondent notes in its contentions by reference to the judgment in Douglas at [154]:
There is no dispute in Douglas that the definition of ‘pension’ in subsection 10(1) of the SIS Act is an inclusive definition, meaning that a benefit provided by a superannuation fund will be a pension within the meaning of the SIS Act if it:
(a)is a pension within the ordinary meaning of the word, or
(b)is taken under the SIS Regulations to be a pension for the purposes of the SIS Act.
I accept that submission.
The fortnightly payments which the applicant receives as invalidity payments fall within the definition of a pension as that word is ordinarily understood. The ongoing receipt of fortnightly payments over an extended period bears the hallmark of a pension. Accordingly, subparagraph (i) of the definition is satisfied.
Further, there is no dispute that the benefit commenced before 20 September 2007. In those circumstances the payments meet subparagraph (ii) of the definition of a superannuation income stream in paragraph (b).
Consequently, the benefit he receives is a superannuation benefit, specified in the regulations, and paid from a superannuation income stream. In those circumstances it meets the definition of a ‘superannuation income stream benefit’ under the ITAA 1997 and is not a lump sum.
That being the case, it would be unlawful to apply section 307-145 in determining the applicant’s tax liability given that it only applies when (among other things) the benefit is a superannuation lump sum. For the reasons explained above the applicant’s benefit is not a superannuation lump sum.
For completeness I note that the definition of superannuation income stream benefit originally inserted into the ITAR 1997 in 2007 was significantly expanded in 2013.[25] However, the expansion did not materially alter the benefit specification which was relevant to the applicant. It is also worth noting that amendments were made to the ITAR 1997 in 2018 which directly and explicitly specified superannuation benefits for the purposes of section 307-70(1) of the ITAA 1997. The amendment also removed the election exception and applied the amendment retrospectively. This had the practical effect that unless an election had already been made to treat a benefit as a lump sum benefit, then an election could not now be made. This is relevant to later years and is discussed further below.
[25] Income Tax Assessment Amendment (Superannuation Measures No 1) Regulation 2013 (Cth).
I also note that the applicant is adamant that his circumstances “fall outside of the dates in SIS Regulation 1.06(1A)(b)…and therefore must be considered as a Disability Lump Sum Benefit”.[26] While the first statement is true as a matter of fact, the second does not follow. Under the ITAR 1997 definition of ‘superannuation income stream’, there are multiple ways in which an income stream can qualify as a superannuation income stream. An income stream that is taken to be a pension for the purposes of the SIS Act in accordance with subregulation 1.06(1A) of the SIS Regulations is only one of them. While the applicant’s circumstances fall outside of the requirements of that subparagraph of the definition, his circumstances fall squarely within paragraph (b) of the definition for the reasons which are discussed above. Consequently, even accepting his argument on subregulation 1.06(1A), the benefit cannot be characterised as a lump sum benefit for tax purposes.
[26] ST6 – 39.
2015 and 2016 Income Years
The respondent did not deal in a substantive way with the applicant’s assessments for the years 2015 and 2016 in its objection decision. The reviewable decision states:
You previously received an objection decision on 19 January 2017 for the years ended 30 June 2015 and 30 June 2016. As we have already made a decision on how your invalidity payments are taxed already, your objection to these years is invalid.[27]
[27] ST9 – 52.
It was put to me at the hearing that the Tribunal did not have jurisdiction in relation to the years 2015, 2016 and 2017. The applicant appeared to acquiesce in respect of that proposition.
Despite this, I consider that I ought to deal with the substantive issue raised in relation to these years, given that the applicant clearly objected in relation to the assessments for those years, and there is no evidence before me of any earlier decisions on objections in relation those years.
The analysis in relation to the 2015 income year and the 2016 income year is the same as the analysis for the 2007-2014 income years. The applicant’s MSB payments were at all relevant times a superannuation benefit specified in the regulations. The applicant never made an election which had the potential to exclude them from being classified as such. The payment was paid from a superannuation income stream for the reasons explained at above. In these circumstances the payments were not a lump sum and did not qualify for concessional treatment under section 307-145.
2017 Income Year
In relation to this income year the respondent put to me that I did not have jurisdiction to consider the objection. The argument is based on the proposition that under the Taxation Administration Act 1953, there is no right to object to a nil or loss assessment, unless the request would increase the tax liability. Subsections 175A(2) and 175A(3) of the ITAA 1936 provides that a taxpayer cannot object under subsection 175A(1) against an assessment ascertaining that the taxpayer has no taxable income or the taxpayer has an amount of taxable income and no tax is payable. Put another way, if the assessment is that there is no taxable income or that there is an amount of taxable income but no tax is payable, the affected taxpayer has no right to object unless an increase in tax liability is sought. As the applicant is prevented from objecting to a nil assessment in accordance with s 175A(2) of the ITAA 1936, the Tribunal has no power to consider the objection in relation to this year of income.
While it was difficult to understand how the applicant’s MSB payments were taxed in the 2017 income year, it is clear that the applicant received a nil assessment.[28] There is no basis for forming the view that the applicant’s request would increase his tax liability.
[28] ST19 - 392.
I am satisfied that the applicant has no right to object to the assessment and equally the Tribunal cannot consider the objection.
2018 to 2020 Income years
In respect of these years the applicant again objects to the assessments on the ground that his MSB is a superannuation lump sum and should be taxed in accordance with s 307-145.
In relation to this time period it is even more clear that the applicant’s payments are a superannuation income stream benefit.
In 2018 the Treasury Laws Amendment (Miscellaneous amendments) Regulations2018 (Cth) amended the ITAR 1997 by introducing regulation 307.70.01 which unambiguously specified all superannuation benefits for the purposes of subsection 307-70(1). The only exception was benefits paid before 1 July 2017 which met a number of other criteria.
As the applicant’s benefits in the income years from 2018 onwards were all paid after 1 July 2017, there cannot be any doubt that they have been specified by the regulations.
For the reasons set out above, the applicant’s benefit payments are also paid from a superannuation income stream, and the benefit therefore meets the definition of a superannuation income stream benefit and cannot be treated as a lump sum benefit for the purposes of section 307-145.
For these reasons the objections cannot be upheld on the grounds advanced and the Tribunal affirms the respondent’s decisions dated 17 September 2021, and 19 March 2021 (in so far as it deals with the income years 30 June 2018 to 30 June 2020).
Decision
The decisions under review are affirmed.
I certify that the preceding 73 (seventy three) paragraphs are a true copy of the reasons for the decision herein of Senior Member Damien O’Donovan.
.............................[sgd]...........................................
Associate
Dated: 16 December 2022
Date(s) of hearing: 19 May & 21 June 2022 Applicant: Self-represented Counsel for Respondent: Jill Gatland
Solicitor for the Respondent Daniel Ryan, Australian Government Solicitor
0