with a release authority to the extent they are able to do so. That is, they are only required to release the lesser of the amount stated in the release authority and the available release amount’ (being the total ‘maximum amount that can be paid out of the superannuation interest identified in the release authority). Superannuation providers must also notify the Commissioner of a payment made in accordance with the release authority, or that they have chosen not to comply (where permitted). In addition to the amendments that introduced Division 131, separate amendments to Schedule 1 to the Superannuation Industry (SISR 1994) were made by the (Supervision) Regulations 1994 Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations These amendments apply from 1 July 2018 and will replace the 2017. existing condition of release at item 111A of Schedule 1 to the SISR 1994 with a more general reference to release authorities issued under Division 131. These changes authorise a superannuation provider to pay the amount stated in the release authority out of the superannuation system. Tax treatment of amounts released under a release authority The general tax treatment of superannuation benefits (which include lump sums paid out of superannuation) is provided by Division 301 of the ITAA 1997. Ordinarily, the tax treatment of a superannuation benefit is determined by the status of the recipient and the of the benefit. ‘components’ Despite this general approach, superannuation benefits are nonassessable non-exempt (NANE) if they are paid in response to a release authority issued in relation to an excess concessional contribution determination, excess nonconcessional contribution determination, or a release entitlement in respect of Division 293 tax (see sections 303-15 to 303-20 of the ITAA 1997). From 1 July 2018, the rules that provide this NANE treatment will simply refer to release authorities issued under Division 131. The proportioning rule in section 307-125 of the ITAA 1997 does apply to a payment that is required or permitted not under Division 131. For releases in relation to excess concessional contributions determinations, the benefit of the deduction that was initially claimed by the entity that made the contribution is already unwound by including the amount of the excess in the individual’s assessable income. As this occurs irrespective of whether the excess contributions are released, no additional tax applies to release amounts.
with a release authority to the extent they are able to do so. That is, they are only required to release the lesser of the amount stated in the release authority and the ‘maximum available release amount’ (being the total amount that can be paid out of the superannuation interest identified in the release authority). Superannuation providers must also notify the Commissioner of a payment made in accordance with the release authority, or that they have chosen not to comply (where permitted). In addition to the amendments that introduced Division 131, separate amendments to Schedule 1 to the Superannuation Industry (Supervision) Regulations 1994 (SISR 1994) were made by the Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017. These amendments apply from 1 July 2018 and will replace the existing condition of release at item 111A of Schedule 1 to the SISR 1994 with a more general reference to release authorities issued under Division 131. These changes authorise a superannuation provider to pay the amount stated in the release authority out of the superannuation system. Tax treatment of amounts released under a release authority The general tax treatment of superannuation benefits (which include lump sums paid out of superannuation) is provided by Division 301 of the ITAA 1997. Ordinarily, the tax treatment of a superannuation benefit is determined by the status of the recipient and the ‘components’ of the benefit. Despite this general approach, superannuation benefits are nonassessable non-exempt (NANE) if they are paid in response to a release authority issued in relation to an excess concessional contribution determination, excess nonconcessional contribution determination, or a release entitlement in respect of Division 293 tax (see sections 303-15 to 303-20 of the ITAA 1997). From 1 July 2018, the rules that provide this NANE treatment will simply refer to release authorities issued under Division 131. The proportioning rule in section 307-125 of the ITAA 1997 does not apply to a payment that is required or permitted under Division 131. For releases in relation to excess concessional contributions determinations, the benefit of the deduction that was initially claimed by the entity that made the contribution is already unwound by including the amount of the excess in the individual’s assessable income. As this occurs irrespective of whether the excess contributions are released, no additional tax applies to release amounts.
c2017-t200724-Explanatory-memo.docx