In the Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014 we finally get the final rules that will allow the refund of excess non-concessional contributions. We have discussed this change when it was released as draft legislation. But the final legislation is different from the draft legislation in the following ways:
There is no longer a requirement an amount withdrawn from a superannuation fund must be from the member’s tax-free component. Therefore, a release authority payment will always reduce the taxable component of a superannuation interest in accumulation phase.
The time limit for a superannuation fund to pay a release amount to the member has been increased from 7 days to 21 days.
The fund will only release 85% of the earnings they calculate. However, 100% of the earnings will be taxed in the taxpayer’s amended tax return, but the taxpayer will get a 15% offset for the earnings tax the fund will pay.
These are three great changes…