The Full Federal Court has held that the Administrative Appeals Tribunal misapplied the “special circumstances” test. The Tribunal had held that there were no special circumstances in relation to Mr Ward’s excess non-concessional contributions which warranted the ATO to disregard or reallocate the excess contributions to another tax year. The Full Federal Court set aside the decision of the Tribunal and remitted the case to the Tribunal for reconsideration.
The Court held (at paragraph 39) that if the Tribunal could conclude that the application of excess contributions tax was unfair, unintended or unjust then there must have been some feature out of the ordinary. The Court also held (at paragraph 40) that the Tribunal had erred by proceeding on the basis that because the imposition of the excess contributions tax was the natural and foreseeable consequence of the taxpayer’s actions, then (necessarily) there could be no “special circumstances”.
While this decision represents a victory for the taxpayer, the Court remitted the matter back to the Tribunal for reconsideration having regard to the findings of the Court.
Case Details: Ward v Commissioner of Taxation [2016] FCAFC 132
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