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I have received a Compensation payments for poor financial advice

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Newbie

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If I receive a compensation payment for poor financial advice which the bank says must be paid into my superannuation fund, how is it treated for tax purposes? Does it count as a contribution toward either my concessional or non-concessional cap, or is it treated as a capital payment within the fund?

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Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @JGreen,

 

Welcome to our Community!

 

We can provide you with general information here on our Community, however the situation you've described is a bit more complex and we don't know all the information to provide a definite answer.

 

You can find general information about income you must declare on our website, including information about compensation due to loss of income. However, as payments made into super funds are generally a contribution, it will need to be determined how the payment is classified.

 

To receive a more tailored response, you can write to us and request a private ruling. Private rulings are binding advice that explains our view on how the tax law applies to your specific situation. They are a free service and we aim to response within 28 days from receiving your request.

 

Thanks, JodieH.

1 REPLY 1

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @JGreen,

 

Welcome to our Community!

 

We can provide you with general information here on our Community, however the situation you've described is a bit more complex and we don't know all the information to provide a definite answer.

 

You can find general information about income you must declare on our website, including information about compensation due to loss of income. However, as payments made into super funds are generally a contribution, it will need to be determined how the payment is classified.

 

To receive a more tailored response, you can write to us and request a private ruling. Private rulings are binding advice that explains our view on how the tax law applies to your specific situation. They are a free service and we aim to response within 28 days from receiving your request.

 

Thanks, JodieH.