FHSS Taxed Non-Concessional Amount

[#1]

Hi,

I have moved to Australia on a permanent residency visa at the end of June 2019, thus I did no lodge any Tax return for the financial year 2018/19. On the 12th of August I have put $15,000 from my savings into my superannuation fund (non-concessional contribution), with the intention of applying for the First Home Buyer super scheme later on.

Just before Christmas I have applied for the determination and release of the $15,000. However determination reported I could claim only $12,965. In addition, just yesterday I have received a notification from ATO that the actual funds released (after tax) are $10,761.

I had a chat with ATO phone support and I've been told I did something wrong, and that I had to double check with my super fund.

I did check, and the $15,000 I have initially put in my super fund have been classified as "After Tax", and not from income, thus non-concessional.

What can I do to receive the money that have been removed?

Thank you,

Marco

[#2 · Accepted solution]

HI @Marco85,

A couple of things may have affected the amount. If you have claimed a deduction for any of the contributions this would change them to concessional contributions, which means only 85% is released. If you ad any debts with any commonwealth agencies, they would be paid before the money is released to you.

If neither of these situations apply I would suggest checking with your super fund.

KylieS

[#3]

Hi @KylieATO,

Thank you for your reply.
I doubt I have any debts with commonwealth agencies since I move to Australia less than a year ago.
I am quite ignorant in the matter, and I might have erroneously claimed a deduction for my $15,000 contribution.

Do you think I can recover the "lost" money?

[#4]

Hi @Marco85

Thanks for getting back to us.

If you had no Commonwealth debts, it sounds like you told us that you had claimed or will be claiming a tax deduction for some or all of the voluntary contributions. Alternatively, you marked them as salary sacrifice contributions.

Either way, while you can submit multiple FHSS determination requests, you can only submit one release request. There is no option to cancel it, withdraw it or object to it after it has been submitted. If the amount that you have received is in accordance with the information you provided, it is correct.

For more information about applying to release your savings, refer to the FHSS scheme page on our website.

If you don't think that it is correct and you think that we have made a mistake, we recommend that you get in touch with us. Our contact details are on our website.

Sorry we can't be more helpful.

Thanks, ChrisR

[#5]

Hi Chris,

I did not do any salary sacrifices, nor I have Commonwealth  debts.

I have moved to Australia recently, and I am not very familiar with all the ATO procedures and definitions. This is why I did ask for help to ATO during the application process for the FHSS.
I think I might have misunderstood it, and selected that I will be claiming a tax deduction for my voluntary contributions (after tax).
What is then going to happen? Have I lost my money? How much will be returned in case?

Thank you

[#6]

@Marco85

Thanks for your reply.

As mentioned previously, if you have made a mistake with your FHSS determination request, you can only correct it if you are able to submit a new determination request. This option isn't available to you because you have already submitted a FHSS release request.

Based on the information that you have provided, the 15% tax that we think your super fund has withheld from your $15,000 voluntary contribution hasn't actually been withheld. In turn, $2,250 isn't lost and is still with your fund.

You won't be able to claim that amount unless you meet a different condition of release (refer to our website) but it isn't lost.

You will be able to declare the 17% tax that we have withheld from your FHSS release amount of $12,965 as a credit on your 2020 income tax return. That rate is based on the highest marginal tax rate plus Medicare levy less a 30% offset.

Depending on how much your 2019-20 taxable income is, the 17% tax rate may have been too high. In turn, you may be entitled to some or all of the $2,204 back as a refund.

Hope this helps.

Thanks, ChrisR