Private ruling: Deduction for personal superannuation contributions
Published: August 2014
Ruling period: The year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Can your client lodge a Notice under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) with the original recipient superannuation fund after the contribution has been rolled over to a new superannuation? | A1: No | Q2: Can your client lodge a Notice under section 290-170 of the ITAA 1997 with the new superannuation fund after the contribution has been rolled over from the original superannuation fund? | A2: No

Relevant facts and circumstances: Your client was a member of the original recipient fund. During the 2013-14 income year, your client made contributions to the original recipient fund. During the 2013-14 income year, your client rolled over their entire balance in the original recipient fund to the new superannuation fund. Your client did not submit a notice of intent to deduct (the Notice) to the original recipient fund prior to, or after, the roll-over occurred. You state that your client had intended to claim a tax deduction for the amounts contributed prior to the roll-over of funds from the original recipient fund to the new superannuation fund. Your client has claimed a tax deduction for personal contributions made to the original recipient fund in previous years. You have provided documentation which shows your client has been in contact with the new superannuation fund as to whether a Notice can be lodged with it as the original recipient fund has declined a request made by your client.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 290-150. | Income Tax Assessment Act 1997 Subsection 290-150(2). | 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(1). | Income Tax Assessment Act 1997 Subsection 290-170(2). | Income Tax Assessment Act 1997 Subsection 290-170(5). | Income Tax Assessment Act 1997 Subsection 290-170(6). Summary | Your client lodging a notice of intent to deduct personal contributions made in the 2013-14 income year with the original recipient fund, after the roll-over was made from that fund, would result in the notice being invalid as: | (a) your client is no longer a member of the fund; and | (b) the trustee of the fund no longer holds those contributions. | Further, lodging a notice of intent with the new superannuation fund in relation to the contributions rolled over from original recipient fund would also be invalid it was not the original recipient of the contributions. | Therefore your client is ineligible to claim a tax deduction for the personal contributions made to original recipient fund in the 2013-14 income year. | Detailed reasoning | Personal 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, 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 must all be satisfied before the person can claim a deduction for the contributions made in that income year. | These conditions are explained in detail in Taxation Ruling TR 2010/1 entitled 'Income Tax: superannuation contributions' . | Notice of intent to deduct conditions | Section 290-170 of the ITAA 1997 requires a person to provide a valid notice (the Notice) of their intention to claim a deduction for their superannuation contributions to the trustee of their superannuation fund. The notice must be given by the earlier of the date you lodge your income tax return or the end of the income year following the year in which the contribution was made. You must also have been given an acknowledgement of the notice by the trustee or the provider. | Validity of notices | Subsection 290-170(2) of the ITAA 1997 sets out the conditions which specify when a Notice will not be valid. Among these conditions it is specified that a notice will not be valid if, at the time when the notice is given, the trustee no longer holds the contributions. | Under subsection 290-170(2) of the ITAA 1997, it states: | 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 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 made a contributions splitting application (within the meaning given by the regulations) in relation to the contribution; and | (ii) the trustee or RSA provider had not rejected the application. [bold emphasis added] | In the present case, your client made personal contributions to the original recipient fund during the 2013-14 income year and subsequently rolled over their balance in that fund (the original recipient) to the new superannuation fund later in the 2013-14 income year. Further, no Notice was lodged by your client, before or after the roll-over, with the original recipient. | In view of the above it is considered that should your client provide the original recipient fund with a Notice, that Notice would not be valid as at the time when the Notice is given: | (a) your client is no longer a member of that fund (subparagraph 290-170(2)(c)(i) of the ITAA 1997); and | (b) the trustee of that fund no longer held the contributions (subparagraph 290-170(2)(c)(ii)). | Further, the successor fund provision under subsection 290-170(5) of the ITAA 1997 would not apply as the receiving fund, the new superannuation fund, would not meet the definition of 'successor fund' under subsection 9951(1): | successor fund , in relation to a transfer of a *superannuation interest of a member of a *superannuation fund, or a holder of an *RSA, (the original fund ) means a superannuation fund or RSA that satisfies the following conditions: | (a) the fund or RSA confers on the member or holder equivalent rights to the rights that the member or holder had under the original fund in respect of the interest; | (b) before the transfer, the *superannuation provider of the fund or RSA has agreed with the superannuation provider of the original fund that the fund or RSA will confer on the member or holder equivalent rights to the rights that the member or holder had under the original fund in respect of the interest. | Nor would subsection 290-170(6) of the ITAA 1997 apply as it deals with amounts transferred to a MySuper product in another complying superannuation fund. | It should also be noted that if your client was to provide a Notice to the new superannuation fund, that Notice would not be valid. This is because a deduction for personal contributions requires a valid Notice to be provided to the original recipient fund of the contributions. | Further, when a roll-over occurs this does not result in the new superannuation fund becoming the entity to which a Notice can be provided. The requirement remains that a Notice can only be made to the fund to which the contributions were originally made. | In the present case, your client made personal contributions to the original recipient fund during the 2013-14 income year. Notwithstanding a valid Notice cannot be made to the original recipient fund, for reasons already discussed, it still remains that the original recipient fund was the only entity which could have accepted a Notice. | Whilst it is noted that your client had intended to claim a tax deduction for the contributions prior to the roll-over of funds from the original recipient fund to the new superannuation fund, it should be noted that there are no provisions in section 290-170 of the ITAA 1997, or elsewhere in Subdivision 290-C, to allow the reclassification of the contributions made to the original recipient fund in the 2013-14 income year from non-concessional to concessional contributions. | In view of the above, your client does not satisfy the notice of intent to claim a deduction conditions prescribed under section 290-170 of the ITAA 1997 and consequently not eligible to claim a deduction for personal superannuation contributions made to the original recipient fund in the 2013-14 income year.