Schuurmans-Stekhoven v Commissioner of Taxation

[2012] AATA 62

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL        )

)         No: 2011/3147

Taxation Appeals Division  )

Re: William Schuurmans-Stekhoven
Applicant

And: Commissioner of Taxation
Respondent

CORRIGENDUM

TRIBUNAL:             Senior Member Bernard J McCabe

DATE:                      7 February 2012

PLACE:                   Brisbane

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:

Where at paragraph 7 the tribunal’s decision reads “Given it appears it was accepted practice that the super contributions were paid in advance” the decision should now be read as “Given it appears it was accepted practice that the super contributions were paid in arrears”.

........................[Sgd]....................................

Senior Member

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2012] AATA 62

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          2011/3147

TAXATION APPEALS DIVISION		)
Re		WILLIAM SCHUURMANS-STEKHOVEN

Applicant

And  THE COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal  Senior Member Bernard J McCabe

Date 13 January 2012

Place Brisbane

Decision  The Tribunal affirms the decision under review.

....................[Sgd]....................

Senior Member

CATCHWORDS

TAXATION ─ exceed superannuation contributions ─ Commissioner’s discretion ─ special circumstances ─ definition of special circumstances ─ decision affirmed

LEGISLATION

Income Tax Assessment Act ss 292-465,

REASONS FOR DECISION

6 February 2012  Senior Member Bernard J McCabe

1.Mr Bill Stekhoven, the taxpayer, exceeded the superannuation contributions cap in the year of income ending 30 June 2008. He asked the Commissioner to exercise the discretion under s 292-465 of the Income Tax Assessment Act 1997 to reallocate a payment in the amount of $8440 that had been made by his employer into the taxpayer’s super fund on or about 10 July 2007. Mr Stekhoven said the payment should have been treated as if it were made in the previous year of income.

2.The Commissioner’s power to reallocate an amount to a different period is found in s 292-465(3). The discretion is enlivened where the Commissioner is satisfied there are special circumstances. The expression special circumstances is undefined, but its meaning is tolerably clear: the circumstances which affect the taxpayer must be unusual or out of the ordinary; they must suggest this case ought to be treated differently to other cases because it is different or unusual.

3.I note s 292-465(4) permits the Commissioner to have regard to the matters in sub-sections (5) and (6) when forming a view as to whether special circumstances exist. Sub-sections (5) and (6) provide:

(5)  The Commissioner may have regard to whether a contribution made in the relevant financial year would more appropriately be allocated towards another financial year instead.

(6)  The Commissioner may have regard to whether it was reasonably foreseeable, when a relevant contribution was made, that you would have excess concessional contributions or excess non-concessional contributions for the relevant financial year, and in particular:

(a) if the relevant contribution is made in respect of you by another person--the terms of any agreement or arrangement between you and that person as to the amount and timing of the contribution; and

(b)  the extent to which you had control over the making of the contribution.

4.Mr Stekhoven represented himself at the hearing. He explained his situation. He said the contribution made on or about 10 July 2007 related to work he had done and commissions he received towards the end of the 2006-2007 financial year. He says it is inappropriate to say the contribution was made in July 2007. He added that if he had been aware (a) the amount would be regarded as having been received in July, and (b) taxation consequences might flow from making a payment in July rather than in June, he would have urged his employer to make sure the payment was made before the end of the 2006-2007 financial year. Mr Stekhoven thinks the decision is unfair because he was not aware of the consequences of his employer’s actions. He surmises that many, many taxpayers will have unwittingly fallen into the same trap.

5.Mr Ballans, for the Commissioner, said there was no suggestion that Mr Stekhoven has acted improperly or dishonestly. Mr Ballans said there is no suggestion the employer acted improperly either: the employer was entitled to make the payment into the super fund when it did. The consequences for Mr Stekhoven were an unfortunate but inevitable result of the application of the rules which, while detailed, are available for anyone to see. Mr Ballans said the matters referred to by Mr Stekhoven did not amount to special circumstances in the relevant sense. Indeed, Mr Ballans suggested the fact many taxpayers might have experienced the same consequences as Mr Stekhoven tended to emphasise there was nothing special about Mr Stekhoven’s position.

6.In urging that result, Mr Ballans pointed out there was nothing inappropriate within the meaning of sub-section (5) about allocating the payment to the 2008 year of income. The employer was acting lawfully in making the payment in arrears. Mr Ballans noted the payment was made into the super fund well before the applicable deadline for making payments. The employer had been making payments in arrears over a long period, which is unremarkable in the circumstances.

7.Mr Ballans also pointed out the applicant had not agreed with his employer that payments were to be made in a different way, or on a different schedule. Indeed, the taxpayer appears to have retained some control over the amount and timing of payments because of the fact he earned commission income and could not be certain how much was to be paid in advance. Given it appears it was accepted practice that the super contributions were paid in advance, I do not think the matters referred to in sub-section (6) assist the taxpayer.

8.In the circumstances, I do not think the taxpayer has been able to identify special circumstances that would enliven or justify the exercise of the discretion under s 292—465. In those circumstances the objection decision must be affirmed.

I certify that the 8 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe

Signed: .................[Sgd]..........................................................
  Associate

Date of Hearing   13 January 2012
Date of Decision   13 January 2012
Applicant   Self-Represented
Counsel for the Respondent     Mr Ballans
Solicitor for the Respondent      ATO Legal Services Branch