Private ruling: Deductibility of personal superannuation contributions
Published: March 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the taxpayer eligible to claim a deduction under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) for the full amount of personal superannuation contributions that were made in the 2013-14 income year? | A1: No

Relevant facts and circumstances: The taxpayer was a member of a complying Australian superannuation fund (the Fund). During the 2013-14 income year, the taxpayer had made a number of personal contributions to the Fund. Also during the 2013-14 income year, the taxpayer rolled a portion of their superannuation benefits out of the Fund. The amount that was rolled over contained a portion of the taxpayer's personal superannuation contributions made in the 2013-14 income year. During the 2014-15 income year, the taxpayer provided the trustee of the Fund with a notice of intention to claim a deduction for the full amount of personal superannuation contributions made in the 2013-14 income year. Soon after receiving the notice, the Fund advised the taxpayer that they were not eligible to claim the full amount as a personal tax deduction as the Fund no longer holds all of the contributions covered by the notice. The taxpayer has not yet lodged their tax return for the 2013-14 income year. According to the private ruling application, the taxpayer had made a genuine mistake in rolling the funds over before providing the notice and would like to claim a tax deduction for the full amount.

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 full amount of superannuation contributions made in the 2013-14 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 full amount of personal superannuation contributions made to the Fund in the 2013-14 income year. | Detailed Reasoning - Personal deductible superannuation contributions: 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, 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: • the date that person lodges their income tax return for the income year in which the contributions were made; or • 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 if one or more of the following conditions in subsection 290-170(2) of the ITAA 1997 are satisfied: (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, during the 2014-15 income year, provided the Fund with a notice of intention to claim a deduction for the full amount of personal superannuation contributions made in the 2013-14 income year. However at this point, the Fund no longer held the entirety of the contributions made in the 2013-14 income year. This is because the taxpayer had already rolled a portion of their 2013-14 superannuation contributions out of the Fund during that income year. Therefore, the notice provided by the taxpayer during the 2014-15 income year, was not a valid notice pursuant to section 290-170 of the ITAA 1997 and as such, the trustee of the Fund was not able to provide the taxpayer with an acknowledgement of the notice. As the taxpayer has not provided a valid notice in relation to the full amount of the contributions and as the Fund has not given an acknowledgement of receipt, 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 for the full amount of the contributions. The taxpayer is thus not entitled to claim a deduction for the full amount of personal superannuation contributions made to the Fund in the 2013-14 income year. | Detailed Reasoning - Other relevant comments: While it may have been the case that the taxpayer had made a genuine mistake, 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. Whether a mistake had been made 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. The due date for providing a valid notice for 2013-14 is the earlier of the date the taxpayer lodges their 2013-14 income tax return or 30 June 2015. The taxpayer may, before the due date, still provide a valid notice to the Fund in relation to the portion of their 2013-14 contributions that the Fund still holds. The taxpayer will then be able to claim a deduction for this portion of the contributions, assuming that the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 are satisfied.