SQQM and Commissioner of Taxation (Taxation)

This matter concerned an application by SQQM (the Applicant) to review a decision by the Commissioner of Taxation (the Respondent) to refuse to disregard certain non-concessional superannuation contributions made by the Applicant. The dispute arose from the Applicant exceeding her non-concessional contributions cap for the 2019 income year, resulting in an excess non-concessional contribution determination. The Applicant sought to have these excess contributions disregarded under subsection 292-465(1) of the *Income Tax Assessment Act 1997* (ITAA). The Administrative Appeals Tribunal was required to determine whether the preconditions for exercising the discretion to disregard the contributions were met and, if so, whether the discretion should be exercised in the Applicant's favour.

The Tribunal considered whether "special circumstances" existed to justify the exercise of the discretion to disregard the excess non-concessional contributions. Specifically, it examined whether it was reasonably foreseeable, at the time the contributions were made, that the Applicant would have excess non-concessional contributions, having regard to the extent of her control over the making of those contributions. The Applicant argued that her circumstances, including a cancer diagnosis and treatment, post-traumatic stress disorder, and reliance on her accountant's advice, constituted special circumstances. The Respondent contended that no special circumstances existed, that disregarding the contributions would be inconsistent with the object of Division 292 of the ITAA, and that it was reasonably foreseeable that the Applicant would exceed her cap.

The Tribunal found that the Applicant bore the onus of proving that the Respondent's decision was not an appropriate exercise of discretion. It noted that the discretion under section 292-465 of the ITAA is enlivened only if specific preconditions are met, and that the word "may" confers an overarching discretion. The Tribunal determined that there was no basis to allocate the 2019 contributions to a different financial year. Crucially, it found that it was clearly foreseeable, and indeed intended by the Applicant, that her contributions would exceed her nil cap for the 2019 income year, as she had full control over the amount and timing of these contributions. The Tribunal concluded that the Applicant's circumstances did not justify the exercise of the discretion to disregard the excess contributions.

Consequently, the Tribunal affirmed the reviewable decision.