Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014 received royal assent on the 19 March 2015.

As a result taxpayers should now be able to avoid paying excess contribution tax on excess non-concessional contributions made in the 2014 financial year and later.

The amendments give the taxpayer the option of withdrawing the amount in excess of their non concessional contribution cap as well as 85% of a ATO deemed earning amount.

This earning amount will be included in the taxpayer’s assessable income for the year along with a 15% rebate.

The deemed earning amount appears to be a mechanism to stop taxpayers gaining an advantage by putting excess contributions into a concessionally taxed environment only to take them out without penalty later on.

Of course the taxpayer can still choose to pay the excess contribution tax and leave the net amount in their Fund.

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