18ACommutation of retiring allowance—payment of surcharge liability

18A  Commutation of retiring allowance—payment of surcharge liability

 (a) a person is entitled to a retiring allowance under subsection 18(1A), (1B), (8A) or (8AC) or paragraph 18(2)(a) or (aa) or 18(2AA)(a), (b), (c) or (d); and

 (b) an assessment is made of the surcharge on the person’s surchargeable contributions for a financial year; and

 (c) the person becomes liable to pay the surcharge under the assessment in accordance with paragraph 10(4)(c) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997;

the person may, within:

 (d) 3 months after the assessment was made; or

 (e) such longer period as the Trust allows;

give the Secretary of the Finance Department a written notice electing to commute the whole or a part of the person’s retiring allowance to a lump sum benefit equal to the amount specified in the election.

 (1A) However, a person may not make an election under subsection (1) if the person has given the Secretary of the Finance Department a written notice under paragraph 22SC(2)(c).

 (b) must not have the effect of reducing the person’s retiring allowance below zero; and

 (4) If a person makes an election under subsection (1), the person is entitled to a lump sum benefit equal to the surcharge commutation amount.

Note: The person’s retiring allowance will be reduced under subsection 18(8AC).

 (5) If a person is entitled to a lump sum benefit under subsection (4), the liability to pay that benefit must be discharged by:

 (a) paying the amount of that benefit to the Commissioner of Taxation in accordance with the person’s request; and

 (b) informing the Commissioner of Taxation of the person’s request that the amount be wholly applied in payment of surcharge under the assessment concerned.

Notional adjustment debit

 (6) If a person makes an election under subsection (1) on a particular day, there is taken to have arisen at the start of that day a notional adjustment debit of the person equal to the amount worked out using the following formula:

  Start formula start fraction Surcharge commutation amount over Conversion factor end fraction end formula

conversion factor means the factor applicable to the person under the determination made by the Trust under section 22B.

 (7) A person is not entitled to make more than one election under subsection (1) in relation to a particular assessment.