Private ruling: Deductions
Date of advice: 18 December 2019
Published: February 2020
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Are monies paid to the Country Z authorities as contributions to an insurance scheme an allowable deduction? | A1: No

Relevant facts and circumstances: Early 20XX you paid $XXXX to the Country Z authority. The payment was a contribution to an insurance scheme. The payment will increase the amount of foreign pension you may eligible for in the future.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. In your case, you have made a voluntary contribution to the Country Z insurance scheme. This amount is not an expense you have incurred in the course of gaining or producing your assessable salary and wage income, but rather was voluntary amount paid in order to increase the amount of Country Z pension that you may be eligible to receive. Therefore, you are not entitled to a deduction for the amount paid to the Country Z insurance scheme.