Financial advisers wanting to obtain relief from the Australian Taxation Office (ATO) under special circumstances, in regards to excess contributions on behalf of their self-managed superannuation fund (SMSF) clients, need to establish a subjective case about individual circumstances, according to a legal expert in the sector.
If special circumstances can be established the ATO can either disregard the contributions cap breach or can have the excess contributions reallocated.
"What you need to do when you are collecting the facts to assist your client in coming up with this condition is to look for unique requirements. Something that is unique and individual about the person," Argyle Lawyers partner Peter Bobbin said.
"So you really need to go and construct a complete history, particularly in and around the time of the contribution. You need to take as much detail as possible because what you are looking for is a situation or an ability to explain why this person is different to others," he explained.
In establishing the grounds for a unique set of circumstances the adviser will actually be assisting the ATO in creating a comfort level for itself that a precedent will not be created if it decides to exercise discretionary powers, Bobbin said.
"It's actually helping (the ATO) to say to themselves: 'we're not opening the floodgates on this one', because it applies to that person. It means it's special," he said.
According to Bobbin, he has had success in a few cases using the special circumstances relief and said it was well worth the effort.
