Private ruling: Deductibility of personal superannuation contributions
Date of advice: 24 December 2015
Published: March 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Is the taxpayer eligible to claim a deduction under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) for a personal superannuation contribution that was made in the 2014-15 income year? | A1: No

Relevant facts and circumstances: The taxpayer was a member of a complying superannuation fund (the Fund) The taxpayer made a contribution to the Fund during the 2014-15 income year. After the contribution was made, the taxpayer rolled over the superannuation benefits in the Fund to a self-managed superannuation fund. The taxpayer's account with the Fund was closed soon after. After this had occurred, the taxpayer provided the trustee of the Fund with a notice of intention to claim a deduction for the contribution made in the 2014-15 income year. However, the Fund advised the taxpayer that the notice was invalid and that they could not act on the taxpayer's request as the taxpayer's account had been closed.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 290-C | 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 | Income Tax Assessment Act 1997 Subsection 290-170(2)

Reasons for decision: Summary: The taxpayer's notice of intention to claim a deduction for the superannuation contribution made in the 2014-15 income year is not valid because the Fund no longer holds the contributions covered by the notice. The taxpayer is thus not entitled to claim a deduction for the personal superannuation contribution made to the Fund in the 2014-15, income year. | Detailed Reasoning - Detailed reasoning: A person 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 Income Tax Assessment Act 1997 (ITAA 1997). However, the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 of the ITAA 1997 must be satisfied for the person to claim the deduction. In this case, particular consideration is required in relation to section 290-170 of the ITAA 1997 regarding the notice of intent to deduct conditions. | Detailed Reasoning - Notice of intent to deduct conditions: Section 290-170 of the ITAA 1997 requires a person to provide a valid notice, in the approved form, of their intention to claim a deduction to the trustee of their superannuation fund. The notice must be given before the earlier of: a. the date that person lodges their income tax return for the income year in which the contributions were made; or b. the end of the income year following the year in which the contributions were made. In addition, that person must also have been given an acknowledgement of the notice by the trustee of the superannuation fund. A notice of intent to deduct will not be valid in the following situations outlined under subsection 290-170(2) of the ITAA 1997: (a) the notice is not in respect of the contribution; (b) the notice includes all or 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 (emphasis added) (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... in relation to the contribution; and (ii) the trustee or RSA provider had not rejected the application. In this case the taxpayer provided the Fund with a notice of intention to claim a deduction for the personal superannuation contribution made in the 2014-15 income year. However at this point, the Fund no longer held the contribution that was made in the 2014-15 income year. This is because the taxpayer had already rolled their superannuation benefits out of the Fund and closed their account. Therefore, the notice provided by the taxpayer was not a valid notice pursuant to section 290-170 of the ITAA 1997. As the taxpayer has not provided a valid notice, there is no need to examine whether the conditions under sections 290-155, 290-160 and 290-165 of the ITAA 1997 were satisfied. The taxpayer must satisfy all the tests specified in section 290-150 in order to claim the deduction. The taxpayer is thus not entitled to claim a deduction for the personal superannuation contribution made to the Fund in the 2014-15, income year. | Detailed Reasoning - Other relevant comments: While there is little doubt in this case that the taxpayer, by the actions undertaken, had clearly intended to claim a deduction, the legislation is clear on the necessity of providing a valid notice of intention. The law is also very specific in stating the situations where a notice will not be valid. The taxpayer's intention is thus not something which can be taken into account in determining the validity of the notice. Furthermore, there is no discretion under subdivision 290-C of the ITAA 1997 or anywhere else in the tax legislation that would allow the Commissioner to alter the conditions for deducting personal superannuation contributions. For the purpose of these sections, there is also no discretion in the tax legislation that would allow the Commissioner to treat an invalid notice as valid.