The $1 million superannuation opportunity that ended on June 30 last year has had an unforeseen consequence for members of the public in the guise of scrutiny from the Australian Taxation Office (ATO), according to an accounting firm tax partner.
"The tax office is now asking a lot of those superannuants to explain how they funded their contributions. There's a standard letter they are sending out for this purpose," HLB Mann Judd partner tax consultancy and compliance Neil Wickenden said.
The ATO's approach to this additional examination is quite scientific, he said.
"What they have is a program where they review your last two or three returns and there's a fairly standard method which we've seen asking you to explain how you managed to survive on a certain amount over the last five years and fund the opportunity," Wickenden said.
"So they've gone to the [superannuation] funds to obtain the information about the contributions coming in and have been matching that to tax file numbers."
Wickenden believes this result was not predicted by anyone when the new super legislation was passed.
HLB Mann Judd's experience with its clients has been that the $1million contribution was funded in a variety of was including from monetary gifts from other members of family and the selling of investment properties, he added.
Wickenden pointed out that neither of these scenarios would give rise to a perceived problem in the eyes of the ATO.
