Private ruling: Personal Superannuation Contribution Deduction
Date of advice: 20 July 2017
Published: November 2017
Ruling period: Income year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Have you satisfied section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997), a requirement for claiming a deduction for personal superannuation contributions? | A1: No.

Relevant facts and circumstances: At the beginning of the 2015-16 income year you were a member of a superannuation fund (Super Fund) and made a contribution to Super Fund which you intended to claim as a tax deduction. Later in the income year you rolled over your entire benefit from your Super Fund to another different superannuation Fund (Super Fund 2). You sent a notice of intent to claim a tax deduction (the Notice) to Super Fund as required under section 290-170 of the ITAA 1997. Super Fund would not acknowledge the Notice as you were no longer a member with them. You then contacted your Super Fund 2 to see if they could acknowledge the Notice, but as you were not a member of Super Fund 2 at the time that the contribution was made they were unable to assist you. As a result you were unable to receive an acknowledgement of receipt from either fund in relation to the Notice.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 290-150 | Income Tax Assessment Act 1997 section 290-155 | Income Tax Assessment Act 1997 section 290-160 | Income Tax Assessment Act 1997 section 290-165 | Income Tax Assessment Act 1997 section 290-170

Reasons for decision: Detailed Reasoning - Summary of decision: You were no longer a member of Super Fund when you gave the Notice. Therefore the Notice is not valid and section 290-170(1) of the ITAA 1997 has not been satisfied. | Detailed Reasoning - Personal superannuation contributions made in the 2014-15 income year: An individual can claim a deduction for personal contributions made to a superannuation fund for the purpose of providing superannuation benefits for themselves under section 290-150 of the ITAA 1997, provided certain conditions are met. Subsection 290-150(2) of the ITAA 1997 provides that the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 of the ITAA 1997 must all be satisfied before the person can claim a deduction for the contributions made in that income year. | Detailed Reasoning - Notice of intent to deduct conditions: Section 290-170 of the ITAA 1997 deals with the notice of intent to deduct contributions and states: (1) 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. (2) The notice is not valid if at least one of these conditions is satisfied: (a) the notice is not in respect of the contribution; (b) the notice includes all or a part of an amount covered by a previous notice; (c) when you gave the notice: (i) you were not a member of the fund or the holder of the RSA; or (ii) the trustee or RSA provider no longer holds the contribution; or (iii) the trustee or RSA provider has begun to pay a superannuation income stream based in whole or part on the contribution; (d) before you gave the notice: (i) you had made a contributions-splitting application (within the meaning given by the regulations) in relation to the contribution; and (ii) the trustee or RSA provider to which you made the application had not rejected the application. (3) The trustee or provider must, without delay, give you an acknowledgment of a valid notice, subject to subsection (4). (4) The trustee or provider may refuse to give you an acknowledgment of receipt of a valid notice if the value of the superannuation interest to which the notice relates, at the end of the day on which the trustee or RSA provider received the notice, is less than the tax that would be payable in respect of your contribution (or part of the contribution) if the trustee or provider were to acknowledge receipt of the notice. This section provides that in order to deduct the contribution, you must give the trustee of the fund a valid notice in the approved form of your intention to claim the deduction. This condition has two considerations: ● whether the notice is valid, and ● whether the notice was in the approved form. Subparagraph 290-170(2)(c)(i) of the ITAA 1997 clearly states that a notice will not be valid if, when a person gives the notice, they are not a member of the fund. From the above it is evident that once a person has ceased to be a member of the fund it is too late to give a valid notice to the trustee of the fund no matter what intentions the member may have had at the time the contributions were made. The legislation itself is quite specific and only allows a deduction where all the necessary requirements have been met. It does not contain a discretion that can be exercised by the Commissioner to allow a deduction where a valid notice has not been provided. In this instance, you provided Super Fund with the Notice after you had rolled over your entire benefit to Super Fund 2. Hence, you were no longer a member of Super Fund when you gave the Notice. Therefore, the Notice is not valid and section 290-170(1) of the ITAA 1997 has not been satisfied.