Player and Commissioner of Taxation [2011] AATA 35 (28 January 2011)

Last Updated: 28 January 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 35

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/2473

TAXATION APPEALS DIVISION		)
	Re		GILLIAN PLAYER

Applicant

And

COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal

Mr Julian Block, Deputy President

Date 28 January 2011

Place Sydney

Decision

The objection decision under review is affirmed.

..................[sgd]............................
Mr Julian Block
Deputy President

CATCHWORDS

TAXATION AND REVENUE – income tax – superannuation – excess non-concessional contributions tax assessment – whether receipt from superannuation fund was received by applicant as trustee – whether applicant received eligible termination payment or whether roll-over between funds – decision under review affirmed

Income Tax Assessment Act 1936 ss 27A, 27B, 27C

Income Tax Assessment Act 1997 s 306-10

Income Tax (Transitional Provisions) Act 1997

REASONS FOR DECISION

28 January 2011

Mr Julian Block, Deputy President

PART A: PRELIMINARY AND BACKGROUND

1. The objection decision under review is the disallowance by the Respondent of an objection dated 23 October 2009, by the Applicant against an excess non-concessional contributions tax assessment dated 15 September 2009 in respect of the year ended 20 June 2007 (“the relevant year”).
2. The Applicant was represented by Mr Robert Richards of Robert Richards & Associates while the Respondent was represented by Ms Emily Webster of ATO Legal Services.
3. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (“the T documents”). The Applicant had prior to the hearing submitted a witness statement in the form of an affidavit dated 15 October 2010. Ms Webster advised the Tribunal that the Respondent did not require the Applicant for cross-examination and that witness statement was admitted as Exhibit A1. At the commencement of the hearing Mr Richards tendered an affidavit dated 19 January 2011 by the Applicant’s solicitor Mr Robert Tinsey. Ms Webster did not object to that tender and also did not require Mr Tinsey for cross-examination; accordingly that witness statement was admitted as Exhibit A2.
4. There was accordingly no oral evidence before the Tribunal and the matter was argued on the papers before it and consisting of the T documents, the witness statements, and statements of facts, issues and contentions by each of the parties. Each of the parties in the course of furnishing oral submissions provided the Tribunal with written submissions and referred to as “AS” in the case of the submissions of the Applicant and “RS” in the case of the submissions of the Respondent.
5. There does not appear to be any significant dispute between the parties as to the basic facts and it is accordingly convenient to commence and to set out the background, by including, in respect of the Respondent’s Statement of Facts and Contentions (“RSFC”) its content under the head of Facts but confined to clauses 4 to 14 as follows:
   4. During the relevant period, the Applicant was a member of the following superannuation funds:
      • REYALP Superannuation Fund (a self-managed superannuation fund).
      • Summit/IPAC Personal Superannuation Fund.
      • LegalSuper.
   5. The trustee of the REYALP Superannuation Fund was Gria Pty Limited. At the relevant time, the Applicant was the sole director and secretary of that company.
   6. On or about 14 June 2007, the Applicant caused the REYALP Superannuation Fund to draw up a cheque dated 19 June 2007 for an amount of $355,000 to be paid to iAccess Superannuation. That cheque was subsequently cancelled following advice purportedly received by the Applicant from Jim Connell from the Summit/IPAC Personal Superannuation Fund to effect that the funds should be first deposited into the Applicant’s personal bank account before being paid to the Summit/IPAC Personal Superannuation Fund.
   7. On 18 June 2007, the Applicant caused the REYALP Superannuation Fund to pay an amount of $355,000 into her personal bank account and on the same day caused the same amount to be paid to the Summit/IPAC Superannuation Fund.
   8. The $850,000 contributed to Summit/IPAC superannuation fund on 20 June 2007 for the Applicant consisted of $355,000 withdrawn from the Applicant’s bank account on 18 June 2007 and $495,000 contributed to the Summit/IPAC Personal Superannuation Fund via a cheque drawn by William Player.
   9. For the year ended 30 June 2007 (“the 2007 income year”), the Respondent received member contribution statements (MCS) in relation to the Applicant providing the following information:
      

Date MCS received by ATO	Fund	Type of contribution	Amount
12 October 2007	LegalSuper	Non-concessional	$533.08
7 November 2007	Summit/IPAC Personal Superannuation Fund	Non-concessional	$850,000.00
10 May 2008	REYALP Superannuation Fund	Non-concessional	$336,278.41
Total			$1,186,811.49

10. On 24 April 2008 the Applicant lodged her income tax return for the 2007 income year and included an eligible termination payment (“ETP”) of $137,000 from the REYALP Superannuation Fund against the label titled “Assessable amount (other than assessable component)” being the assessable component of the $355,000 paid out by the REYALP Superannuation Fund.
11. On 7 May 2008, the REYALP Superannuation Fund lodged their Regulatory return which showed a benefit payment to a member of $355,000. No amount was shown on this return against the label titled “Outward rollovers and transfers”.
12. Commencing in March 2009, the Applicant was the subject of a review of her tax affairs in relation to a possible liability to excess contributions tax (“ECT”) for having contributed amounts to a superannuation fund or funds in excess of the $1 million threshold.
13. An excessive contributions tax notice of assessment for the 2007 income year was issued on 15 September 2009 with an amount payable of $86,867.30.

14. The Applicant objected to the assessment on 23 October 2009.

6. The Tribunal was advised (and indeed this is clear from the statements of facts and contentions) that there is in fact only one issue between the parties; this matter turns on whether the transaction in respect of an amount of $355,000 referred to in clause 7 of RSFC (and referred to henceforth as the “relevant transaction”) was a superannuation contribution or a roll-over and on the basis that the Applicant will succeed if it was a roll-over but would fail if it was a superannuation contribution. It became clear that a central issue between the parties is the capacity in which the Applicant received that amount; the Applicant contends that she received it in the capacity of trustee of a superannuation fund whereas the Respondent contends that she received it beneficially and in her own right as an eligible termination payment (“ETP”).

PART B: THE EVIDENCE

7. Having regard to the fact that the Applicant was not required for cross-examination the content of Exhibit A1 (excluding annexures) is included in these reasons as follows:

I, GILLIAN PLAYER, of ..., make oath and swear that:

1. I retired on 31 July 2008. For about 46 years prior to my retirement I was employed by my husband who practiced as a solicitor as his office manager, secretary and bookkeeper.
2. The Reyalp Superannuation Fund (“the Fund”) was established in 1980 and I was and have all times been the sole member of that fund.
3. The deed establishing the Fund and the rules of the Fund were amended from time to time so that the rules of the Fund always complied with current superannuation law. Attached as Annexure “A” is a copy of the rules of the Fund as at 30 March 2006. There have been no subsequent amendments to the rules of the Fund.
4. At all material times the trustee of the Reyalp Superannuation Fund was Gria Pty Limited (ACN 001 867 009). I have always been and am still the sole director and secretary of that company.
5. A separate superannuation fund known as the WJ Player Super Fund was maintained for the benefit of my husband.
6. During the year ended 30 June 2007 my husband and I decided that we should both receive allocated pensions from those superannuation funds of which we were members. We felt we required expert advice and accordingly sought independent professional advice from Mr Jim Connell of Ipac Securities Limited.
7. I believe that Mr Jim Connell was employed by and is still employed by Ipac Securities Limited.
8. My husband and I first met with Mr Connell at my husband’s then office at 72 Katoomba Street, Katoomba on 24 April 2007, having first provided Mr Connell, on 10 April 2007, with a list of our assets.
9. Around 31 May 2007 my husband and I received from Mr Connell a ‘Statement of Advice” which include the following statement, a copy of which is attached as Annexure “B”:

“PRE 30 JUNE 2007

1. William & Gillian to borrow $1,000,000
2. William to contribute the following to his self-managed super fund, JW Player Super Fund:

(i) undeducted contribution - $500,000 – from funds borrowed from the bank
(ii) undeducted contribution - $25,000 – currenctly [sic] invested in mortgages
(iii) undeducted contribution - $99,109 – currently invested in Citibank

3. WJ Player Super fund to invest $629,179 in iAccess Investment
4. Gillian to contribute the following to her self-managed super fund, Reyalp Super Fund:

(i) undeducted contribution $500,000 – from funds borrowed from the bank
(ii) undeducted contribution - $250,000 – from her ING Cash Management Trust

5. Reyalp Super Fund to invest $693,463 in iAccess Investment”
10. On 15 June 2007 Mr Connell called at my husband’s office with documents for both my husband and me to sign.
11. After him checking the documentation, and prior to signing same, Mr Connell said:

“It is all wrong. I will have to come back on Monday at 9 o’clock. All the cash in the Super Funds is to go into your cheque accounts and you are to draw bank cheques to iAccess and send them to me.”

12. I then said:

“I have already written out a cheque to iAccess from the Reyalp Super Fund cheque account”.

13. Mr Connell then said:

“You will have to cancel it. I hope its not a bank cheque.”

14. I then said:

“No.”

15. Mr Connell then said:

“You will have to put the money into your cheque account.”

16. I was confused. I then said to Mr Connell:

“Come out to my desk and I will write down what I have to do on Monday.”

17. Mr Connell then followed me to my desk and I opened my diary to that page for Monday 18 June 2007 to record what I had to do. Mr Connell dictated to me what I had to do. I then wrote down in my diary the following note:

“SEND CHQS to Jim by Express Post - Jim Connell, Ipac. All Super Moneys now to go to our PERSONAL A’cs WJP - $255,000, GP - $355,000, then draw to iAccess Super. NAB moneys in our personal a/c so can be drawn direct to iAccess Super $990,000.”
Attached as Annexure “C” is a copy of an extract from my diary.

18. On 18 June 2007 Mr Connell again met with my husband and me at my husband’s office at 9.00 am with the new documentation which my husband and I signed.
19. I then attended at the Katoomba branch of the Commonwealth Bank and transferred from the Gria Pty Limited itf Reyalp Super Fund account $355,000 to my personal account and caused that Bank to draw a bank cheque for $355,000 in favour of iAccess Super. My husband mailed that bank cheque to Mr Connell at Ipac Securities Limited by Express Post.
20. The said sum of $355,000 was only in my personal bank account long enough for me to draw the bank cheque in favour of iAccess Super, that is, just a few minutes.
21. Attached as Annexure “D” is a copy of a bank statement prepared by the Commonwealth Bank of Australia addressed to me beginning on 6 June 2007 and ending on 4 July 2007.
22. I believed that I had caused a roll over funds from my Reyalp Superannuation Fund into the iAccess Superannuation Fund, and I believed that my benefits in the Reyalp Superannuation Fund had been reduced by the sum of $355,000 as a consequence. I relied upon the professional advice of Mr Connell as to how to achieve the rollover, having never done a rollover before.
23. I did not accept that cheque of $355,000 referred to at paragraph 19 above in my personal capacity. Rather I drew that cheque intending it to be for the benefit of iAccess Super and I accepted that cheque as trustee for iAccess Super.
8. Mr Richards advised the Tribunal that Exhibit A2 was tendered in order to explain why the Applicant did not call Mr Connell of Ipac Securities Limited (“Ipac”) (referred to in Exhibit A1) and, so he said, to obviate any adverse inference arising from the fact that that evidence was not available. Exhibit A2 (also without annexures) reads as follows:

I, ROBERT JAMES TINSEY of ..., Solicitor, make oath and swear that:

1. I am the Solicitor for the Applicant herein.
2. I have written to Ipac Securities Limited on 1 April 2009, 12 January 2010 and 7 May 2010 giving them notice that my client will seek it to indemnify her for any loss suffered by her as a result of her following the procedural advice given to her by Mr Jim Connell, Regional Manager for Ipac Securities Limited. I have not received any reply to date. Annexed hereto and marked with the letters “A”, “B” and “C” are copies of the said letters.
3. Ipac Securities Limited wrote directly to Mrs Gillian Player, the Applicant, on 1 July 2010 denying liability.
4. I have formed the opinion that it would be futile to ask Ipac Securities Limited or its Regional Manager, Mr Jim Connell, to provide evidentiary assistance in these proceedings in support of my client’s case because their evidence may prejudice Ipac Securities Limited in respect of foreshadowed proceedings against it.
9. The relevant transaction refers to the payment of $355,000 which was made by REYALP Superannuation Fund (“REYALP”) on 18 June 2007. The superannuation fund which received that payment is referred to in each of RSFC and also the Applicant’s Statement of Facts, Issues and Contentions as “Summit/IPAC Personal Superannuation Fund” although the relevant cheque by the Applicant was drawn in favour of iAccess Superannuation Fund. As a matter of convenience the relevant superannuation fund which received that amount is referred to in these reasons as the “IPAC Fund”. It is common cause that each of REYALP and the IPAC Fund was a complying superannuation fund.
10. Exhibit A1 sets out that although the Applicant originally intended that the amount in question would be paid directly by REYALP to the IPAC Fund she received advice from Mr Connell of Ipac that the relevant transaction should be implemented by cheque in her favour and deposited to her account and followed by a cheque drawn by her in favour of the IPAC Fund. Exhibit A1 contains a statement to the effect that notwithstanding that the Applicant received the relevant amount she did so in trust for the IPAC Fund.
11. Exhibit A2 explains why the Applicant did not seek to call Mr Connell and indeed Mr Richards from the bar table advised the Tribunal that there might be legal proceedings by the Applicant against Ipac. Neither of Exhibit A1 nor Exhibit A2 sets out why the relevant transaction had to be structured in the manner set out previously or, and in particular, the advice by Mr Connell which led to its being structured in this fashion. The fact that the Applicant originally intended that the relevant payment would be made directly by REYALP to the IPAC Fund but that this did not occur in consequence of advice from Mr Connell suggests that there was a reason why this was so. The nature of Mr Connell’s advice to the Applicant was not before the Tribunal.
12. As noted previously in these reasons Exhibit A1 contains a categoric statement that the Applicant received the payment in trust and not beneficially. Mr Richards contended that that statement must be accepted more particularly as the Applicant was not required for cross-examination. The Tribunal considers that it is incumbent on it to have regard to all the evidence before it, and there is other and clear and cogent evidence that the Applicant did not receive that amount in trust but rather that it was received by her and treated by her as an ETP.
13. I do not think it necessary to include the text of sections 27A, 27B and 27C of the Income Tax Assessment Act 1936 (“ITAA 1936”) which were in force during the relevant year. Suffice it to say that the payment in question fell squarely within those legislative provisions.
14. In her tax return for the relevant year the Applicant reflected the receipt of an ETP amounting to $135,590 and being the appropriate portion of the amount received by her from REYALP: T5-16. The Applicant’s tax return for the relevant year was filed by her approximately 10 months after receipt by her of the relevant payment.
15. T6 is the REYALP Superannuation Fund regulatory return for the relevant year. It reflected in clause 33 the payment of a benefit of $355,000; the box as to rollovers, also in clause 33, was completed by the insertion of a reference to nil.
16. Clause 27 of RS reads as follows:
    27. The REYALP Superannuation Fund, of which the Applicant was the sole director and secretary of the corporate trustee, treated the payment of $355,000 as an ETP and not a roll-over. The REYALP Superannuation fund issued an ETP payment summary for the amount of $355,000 to the Applicant for the 2007 financial year. The REYALP Superannuation Fund also reported to the Commissioner for reasonable benefit limit purposes that an ETP of $355,000 was paid on 18 June 2007 to the Applicant. Furthermore, the REYALP Superannuation Fund reported the amount of $355,000 in its Regulatory return lodged with the Commissioner for the 2007 financial year as a benefit paid to a member and not as a roll-over.
17. Evidence in support of the second and fourth sentences of clause 27 of RS is contained in the T documents and as to which see clauses 14 and 15 above. The Respondent did not furnish any specific evidence in support of the third sentence of clause 27 of RS but it was not disputed and there is no reason to doubt it.
18. There can be no doubt that the amount of $355,000 was in fact received by the Applicant and treated by her as an ETP. There was indeed a guarded admission to this effect contained in clause 31 of AS which reads as follows:
    31. Respondent claimed that the payment of $355,000 made by REYALP to the Applicant was an eligible termination payment (“ETP”) for purposes of section 27A(12) of ITAA 36. This might be so. However the relevance of section 27A(12) is whether a payment is or is not a “qualifying eligible termination”. It is not presently relevant whether or not the said amount of $355,000 is a “qualifying termination payment”.
19. The Applicant having received an ETP was entitled to an election and pursuant to which she could take the payment in cash and pay the tax applicable or in the alternative she could roll-over that amount to another superannuation fund and defer any applicable tax. Where a taxpayer wishes to roll-over all or part of an ETP an election to this effect must be made. The Tribunal was advised by Ms Webster that in fact and because the Applicant was then over 60 there was in fact no tax payable. There was no dispute as to the fact that the Applicant did not exercise the roll-over election available to her.
20. Mr Richards in the course of his submissions said that the fact that the Applicant’s accountant might have erred in the preparation of T5 and T6 in a certain manner should not prejudice the Applicant. There was no evidence of any kind before the Tribunal to the effect that those documents were prepared otherwise than as intended. There can be no doubt that the Applicant did in fact receive the amount of $355,000 as an ETP and there can equally be no doubt that she did not receive that amount in trust.
21. Mr Richards drew attention to the trust deed pursuant to which REYALP was established and which is an annexure to Exhibit A1. He drew attention in particular to clause 73 which provided that in respect of any benefit by REYALP an application is required. He contended that since there was no such written application the payment in question could not be a benefit paid to the Applicant. This contention cannot be accepted more particularly as in respect of REYALP the Applicant was the sole shareholder in and sole director of its corporate trustee.
22. I have previously noted that the evidence before the Tribunal does not reveal why in respect of the relevant transaction Mr Connell gave advice as to the manner in which it was to be implemented. There must have been a reason although in the absence of evidence as to the advice given suggestions as to what that evidence might have been must be conjecture only. The Respondent in clauses 36 to 41 of RS furnished suggestions as to what that advice might have been as follows:
    36. The series of transactions that took place on the Applicant’s superannuation accounts in the 2007 income year were in line with a strategy that was commonly used at that time to reduce the amount of tax payable on an individual’s superannuation when it was then converted to a pension, commonly known as a re-contribution strategy.
    37. In a media release on 4 August 2004, the Tax Office advised that strategies of this kind were considered to be for the purpose of maximising superannuation benefits and would not attract the anti-avoidance provisions.
    38. In summary, an individual wishing to retire and commence a pension from their superannuation soon after 30 June 2007 could do the following to obtain a tax benefit and therefore increase the funds available to them during retirement:
        • due to the transitional provisions, an amount of up to $1,000,000 of non-concessional contributions could be contributed to superannuation in the period 10 May 2006 to 30 June 2007; and
        • amounts already in the superannuation system could be withdrawn as an ETP, which after being subject to tax, could then be re-contributed back into a superannuation fund. In doing so, an individual increased the amount of funds held in superannuation that have already been subject to tax and would therefore not be subject to tax when withdrawn or received by a beneficiary upon the individual’s death.
    39. The Applicant can be seen to have utilised this strategy as follows:
        • an amount of $850,000 was contributed to the Applicant’s IPAC/Summit Superannuation Fund account on during the 2007 financial year;
        • the Applicant caused $355,000 to be withdrawn from the REYALP Superannuation Fund on 18 June 2007 as an ETP; and
        • an amount of $355,000 was then re-contributed to the Summit/IPAC Personal Superannuation Fund.
    40. The Commissioner submits that the series of transactions demonstrated that the Applicant was attempting to utilise a re-contribution strategy to maximise the portion of her superannuation benefits that had already been subject to tax. This indicated that the Applicant intended the amount of $355,000 to be an ETP taken in cash rather than a roll-over and inadvertently breached the non-concessional contributions cap when the amount was re-contributed.
    41. The amount of $355,000 contributed to the IPAC/Summit Personal Superannuation Fund cannot be considered to be a roll-over as the Applicant and the REYALP Superannuation Fund treated it as an ETP, such treatment was in line with common financial planning strategies at the time and it does not satisfy the requirements of former subsections 27A(12), 27A(13) or section 27D of the ITAA 1936. Therefore, the personal contribution made to the Summit/IPAC Personal Superannuation Fund is a non-concessional contribution pursuant to section 292-90 of the ITAA 1997 and counts towards the non-concessional contributions cap for that year.
23. Accepting that the suggestions in RS set out in the preceding clause must be treated as conjecture only the Tribunal does think that they are logical. As set out previously, it would have made sense in tax terms to receive the payment as an ETP and then to pay it as an undeducted contribution to the IPAC Fund. The fact that the payment to the Applicant did not attract tax because of the Applicant’s age at the time reinforces the view that structuring of this kind may have been advantageous. Mr Richards contended that there has never been any suggestion that the Applicant was a party to any transaction which could be construed as avoidance and that any such allegation at this stage could not be correct. In the Tribunal’s view the suggestions in RS quoted in the preceding clause, do not suggest avoidance of any kind but speak only of transactions regarded as perfectly legitimate and which were open to the Applicant. It is unnecessary for the Tribunal to seek to detail the advantages entailed but it would seem that the payment received by the Applicant as an ETP attracted no tax and that, and even more to the point, the payment by her to the IPAC Fund was an undeducted contribution which when withdrawn either by the Applicant and on her death her heirs would attract no tax. At the risk of labouring the point, the fact that is that the Applicant treated the payment to her as an ETP and accounted for it in this manner and there is no basis upon which she can now seek to contend that it was not derived by her both legally and beneficially.

PART C: OTHER CONTENTIONS

24. Clause 27 of AS reads as follows:
    27. The Respondent’s assessment is based on a narrow technical application of ITAA 97 and does not reflect the substance of the Applicant’s actions. There is a conflict between the Respondent’s role as a collector of tax and his responsibilities as the Regulator of self-managed superannuation funds (whose role it is to protect person’s entitlements to superannuation benefits). In interpreting the relevant provisions the Tribunal should recognise that the Respondent has a responsibility to protect a person’s entitlement to a superannuation benefit and should interpret the tax law in light of this.
25. The contention referred to in the preceding clause does not clarify how the Respondent could have come to any other view as to the correct position and bearing in mind that he is bound to apply the law in the manner in which it is drafted. The Tribunal does not accept that this contention has any substance.
26. Both parties made reference to certain legislative provisions of a transitional nature which, pursuant to the Income Tax (Transitional Provisions) Act 1997 (“ITTP”) had the effect that certain provisions of the Income Tax Assessment Act 1997 (“ITAA 1997”) which came into effect on 1 July 2007 were treated as being in force during the period 10 May 2006 to 30 June 2007 and thus during the relevant year. It must be remembered that in respect of the relevant year the non-concessional contributions cap was $1 million but that so high a cap did not apply thereafter.
27. Both parties referred at some length to section 306-10 of ITAA 1997 which reads as follows

306-10 A superannuation benefit is a roll-over superannuation benefit if:
(a) the benefit is a superannuation lump sum and a superannuation member benefit; and
(b) the benefit is not a superannuation benefit of a kind specified in the regulations; and
(c) the benefit satisfies any of the following conditions:
(i) it is paid from a complying superannuation plan;
(ii) it is an unclaimed money payment;
(iii) it arises from the commutation of a superannuation annuity; and
(d) the benefit satisfies any of the following conditions:
(i) it is paid to a complying superannuation plan;
(ii) it is paid to an entity to purchase a superannuation annuity from the entity.

28. Mr Richards contended that the legislative provisions as regards ETPs were of no relevance and the fact that the Applicant had treated the payment as an ETP did not preclude her from seeking relief in terms of section 306-10 of ITAA1997. Put in other words, he contended that the relevant transitional provisions should be read as if they stood alone. There is no dispute that section 306-10 did, pursuant to ITTP, apply during the relevant year. I commence by noting that I do not accept that the legislation as regards ETPs was irrelevant and can perceive no legislative warrant for such a contention. But as will be noted the real issue relates to the question of whether the Applicant received the payment both legally and beneficially or legally only and in trust for the IPAC Fund. If she received it both legally and beneficially section 306-10 cannot apply. Put in other words, it is my view that any question of whether or not the ETP legislation was relevant in not to the point. The Applicant must, in order to succeed, show that the relevant transaction falls within section 306-10 and she cannot do so.
29. Section 306-10 is engaged where there is a payment by a complying superannuation plan and where that payment is made to a complying superannuation plan. (Mr Richards drew attention, although by way of comparison only, to section 306-15(1)(a) where the wording is “paid into a superannuation plan.”)
30. The Respondent contends that the requirements of section 306-10 will be satisfied only if a payment is made directly by a complying superannuation plan to a complying superannuation plan and so that if the amount is first deposited to a different account before being on-paid the requirements of the section will not be satisfied. I am by no means sure that so technical a reading of the section is correct but it is not necessary for me, for the purposes of this decision, to come to a firm conclusion as to this issue. I would have thought that it could be argued that where (by way of example) a superannuation plan pays money into a solicitor’s trust account with a direction that the amount be on-paid to a superannuation plan the legislative provisions might be said to be satisfied.
31. But the difficulty which confronts the Applicant in this case is that the payment was not made by a complying superannuation plan to another complying superannuation plan. In respect of the relevant transaction REYALP paid a benefit to the Applicant and which was received by her and treated by her as an ETP and accounted for by her in this manner. Put in other words, she accounted for the payment on the basis and footing that she was entitled to it. She then paid the same amount as a contribution to the IPAC Fund but that payment was made by her and not by a complying superannuation plan. For this reason section 306-10 was not complied with and the relevant transaction cannot be treated as a roll-over.

PART D: CONCLUSION

32. The evidence by the Applicant that she received the amount of $355,000 in trust cannot be accepted and accordingly the on-payment by her to the recipient IPAC Fund was not a roll-over. In the circumstances the objection decision under review must be affirmed.
    

I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of Mr Julian Block, Deputy President

Signed: ...............[sgd].................................................................

Associate

Date of Hearing 20 January 2011

Date of Decision 28 January 2011

Solicitor for the Applicant Mr R Richards

Solicitor for the Respondent Ms E Webster