The case of the excess contributions, the “simple oversight” and the younger wife

The Administrative Appeals Tribunal has dismissed an appeal brought by a taxpayer against a $10,000 tax notice issued by the Commissioner of Taxation after he exceeded the excess contribution cap.

David Lynton brought proceedings in the Administrative Appeals Tribunal after the Commissioner of Taxation declined to use its discretion to disregard $23,627 in non-concessional contributions made by him in 2010.

The Commissioner rejected Lynton’s application and issued an excess contributions tax notice of assessment to the applicant for $10,986.55.

Lynton had made non-concessional contributions of $176,101 in 2008, $147,544 in 2009 and $149,982 in 2010.

He was entitled to make aggregate contributions of $450,000 over three years but the contributions made in the year ending June 2010 exceeded the cap by $23,627.

Lynton acknowledged to the Tribunal that he would have been aware of the $450,000 cap applicable over three years but said he overlooked or forgot about it when making the third of the three contributions in question.

The Commissioner did not dispute that the error “arose from a simple oversight”.

Lynton argued that special circumstances existed and appealed the decision to the Administrative Appeals Tribunal.

“This was based primarily on the financial hardship which he was experiencing in supporting two adult children and five grandchildren; a commitment to provide for his wife who was significantly younger in years; the impact of the global financial crisis on his personal finances; and, specifically, the consequences of a failed investment opportunity,” the Tribunal heard.

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