We have often warned our clients to be beware of exceeding their superannuation caps. A recent judges decision to uphold a $70,000 tax bill for a director of the bookstore chain Dymocks is a good example of why this is so important. The Administrative Appeals Tribunal has upheld a 78% tax rate applied against an $89,000 overpayment by Ann Verscheur. The breach attracts a 31.5% penalty. But Verschuer is also obliged to pay 46.5% tax due to breaching both the concessional and non-concessional caps. Add to that the regular 15% tax on super and the total tax bill amounts to 93%. As you can see, superannuation caps are not to be taken lightly.
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Image compliments of David Castillo Dominic, freedigitalphotos.net