Private ruling: Deductibility of personal superannuation contributions utilizing unused concessional contributions
Date of advice: 1 April 2022
Published: June 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you claim a tax deduction for your personal superannuation contributions made in the 20XX-XX income year under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: Do you meet requirements under subsection 291-20(3) of the ITAA 1997 to have an increased concessional contributions cap in the 20XX-XX income year? | A2: No.

Relevant facts and circumstances: You have accumulated unused concessional contributions cap up to the xx income year. Based on reporting made by your superannuation providers, your total superannuation balance was more than $XXX on 30 June of the previous oncome year. You intend to make personal superannuation contributions in the xx income year and then claim personal superannuation contributions deduction (PSCD) that will utilise the concessional contributions cap amount for that income year and all of the unused concessional contributions. You will give the required Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121) to the relevant superannuation provider within the prescribed legislative timeframes. You will have sufficient income to accommodate the elected PSCD.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 290-150 | Income Tax Assessment Act 1997 section 290-170 | Income Tax Assessment Act 1997 section 291-20 | Income Tax Assessment Act 1997 subsection 291-20(1) | Income Tax Assessment Act 1997 subsection 291-20(3) | Income Tax Assessment Act 1997 subsection 291-20(4) | Income Tax Assessment Act 1997 subsection 291-20(6) | Income Tax Assessment Act 1997 subsection 291-20(7)

Reasons for decision: Summary: The information provided by you and your superannuation providers supports that you are not eligible to utilise your unused concessional contributions as at 30 June 20XX your total superannuation balance was more than $XXX. Accordingly, inclusive of any concessional contributions you make in the 20XX-XX income year, you can claim PSCD up to the general concessional contributions cap of $27,500. | Detailed Reasoning - Detailed reasoning: Section 290-150 of the ITAA 1997 states that you can deduct a contribution you make to a superannuation fund or a retirement savings account for the purposes of providing superannuation benefits for yourself, in the income year that the contribution was made, provided all of the following conditions are satisfied: • the complying superannuation fund conditions under section 290-155 of the ITAA 1997; • the condition that a contribution is not a downsizer contribution under section 290-167 of ITAA 1997; • the condition that a contribution is not a re-contribution under first home super saver scheme under section 290-168 of the ITAA 1997; • the condition that a contribution is not a re-contribution of a COVID-19 early release amount under section 290-169 of the ITAA 1997; • the notice of intent to deduct conditions under section 290-170 of the ITAA 1997. Subsection 290-170(1) of the ITAA 1997 relevantly states: To deduct the contribution, or a part of the contribution: (a) you must give to the trustee of the fund or the RSA provider a valid notice, in the approved form, of your intention to claim the deduction; and (b) the notice must be given before: (i) if you have lodged your income tax return for the income year in which the contribution was made on a day before the end of the next income year - the end of that day; or (ii) otherwise - the end of the next income year; and (c) the trustee or provider must have given you an acknowledgment of receipt of the notice. Subsection 291-20(1) of the ITAA 1997 states: You have excess concessional contributions for the financial year if the amount of your concessional contributions for the year exceeds your concessional contributions cap for the year. The amount of the excess concessional contributions is the amount of the excess. The concessional contributions cap for the 20XX-XX income year is $27,500. Subsection 291-20(3) of the ITAA 1997 then states: However, your concessional contributions cap for the financial year is increased in accordance with subsection (4) if: (a) your concessional contributions for the year would otherwise exceed your concessional contributions cap for the year; and (b) your total super balance just before the start of the financial year is less than $500,000; and (c) you have previously unapplied unused concessional contributions cap for one or more of the previous 5 financial years. Subsection 291-20(4) of the ITAA 1997 directs that you can: Apply your unapplied unused concessional contributions cap for each of the previous 5 financial years (currently 3 financial year can be utilized) to increase your concessional contributions cap (but not by more than the excess from paragraph (3)(a). Lastly, subsection 291-20(6) of the ITAA 1997 states that: You have unused concessional contributions cap for a financial year if the amount of your concessional contributions for the year falls shorth of your concessional contributions cap for the year. The amount of the unused concessional contributions cap is the amount of the shortfall. Based on the information reported to us by your superannuation providers, you don't qualify for the increased concessional contributions cap in the 20XX-XX financial year as at 30 June 20XX your total superannuation balance was more than $XXX. | Detailed Reasoning - Conclusion: Accordingly, inclusive of any concessional contributions you make in the 20XX-XX income year, you can claim PSCD up to the general concessional contributions cap of $27,500.