What to Do If You Receive An Excess Contributions Assessment?

The first thing to do is to check that there has been no misreporting of contributions.  The assessment may have been issued simply because CGT contributions have been reported in the SMSF Annual Return at the incorrect label.  In this case the ATO must be immediately notified of the misreporting so that the appropriate amended assessment can be issued.

If there has been no misreporting of contributions, you may apply to the ATO to have the excess contributions disregarded or reallocated to another financial year.

For the ATO to exercise its discretion to disregard or reallocate the excess contribution you must satisfy two requirements:

• there are special circumstances as to the payment of the excess contribution; and
• disregarding or reallocating the excess contribution must be consistent with the policy of capping super contributions.

The ATO has issued some detailed information on what constitutes special circumstances.  The requirement for special circumstances is extremely onerous.  Merely miscalculating the amount of contributions will not constitute special circumstances nor will not being aware of the contribution caps.

You can only apply to the ATO to disregard or reallocate excess contributions once you have received a notice of assessment of excess contributions tax and you must apply to the ATO within 60 days of receiving the assessment notice.