Document ID: chunk:federal_register_of_legislation:C2007A00009:clause:1_1:p2
Version: federal_register_of_legislation:C2007A00009
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 2/29)
Character Range: 10725–13661

treatment arising from the excessive contributions.

 (2) If concessional contributions exceed an indexed cap, the individual concerned is taxed on the excess. This tax liability can be met by releasing money from his or her superannuation interests.

 (3) If non‑concessional contributions (including any excess for the purposes of the first cap) exceed a second indexed cap, the individual is taxed on the excess. The second cap is equivalent to three times the first cap. The payment of this tax liability must be accompanied by releasing money equivalent to the liability from his or her superannuation interests.

Investment phase

280‑20  Investment phase

 (1) Contributions that can be deducted are assessable income of the superannuation provider. Contributions that cannot be deducted are not assessable income of the superannuation provider. (There are some exceptions.)

 (2) Earnings on the investment of amounts in a superannuation plan are assessable income of the superannuation provider.

 (3) The superannuation provider's taxable income is generally taxed at the concessional rate of 15%.

 (4) However, superannuation providers pay no tax on earnings from the assets that support the payment of benefits in the form of income streams, once the income streams have commenced.

Benefits phase

280‑25  Benefits phase—different types of superannuation benefit

  Superannuation benefits can be drawn down as lump sums, income streams (such as pensions or annuities), or combinations of both. Different tax treatment may apply depending on whether a lump sum or income stream is paid.

280‑30  Benefits phase—taxation varies with age of recipient and type of benefit

 (1) The taxation of superannuation benefits depends primarily on the age of the member.

 (2) If the member is aged 60 or over, superannuation benefits (both lump sums and income streams) are tax free if the benefits have already been subject to tax in the fund (that is, where the benefits comprise a taxed element). This covers the great majority of superannuation members.

 (3) Where a superannuation benefit contains an amount that has not been subject to tax in the fund (an untaxed element), this element is subject to tax for those aged 60 or over, though at concessional rates. This is relevant generally to those people (for example, public servants), who are members of a superannuation fund established by the Australian Government or a state government.

 (4) If the member is less than 60, superannuation benefits may receive concessional taxation treatment, though the treatment is less concessional than for those aged 60 and over.

 (5) Superannuation benefits may also include a "tax free component"; this component of the benefit is always paid tax free.

 (6) Additional tax concessions may apply when superannuation benefits are paid after a member's death.

280‑35  Benefits phase—roll‑overs

  A member can "roll over" their