Private ruling: Deductibility of personal super contributions
Date of advice: 29 June 2015
Published: June 2015
Ruling period: Income year ended 30 June 2014.
Date scheme commenced: 1 July 2013.

Ruling: Q1: Has your client satisfied the conditions in 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: During the 2013-14 income year, your client completed an application form for a certain superannuation fund (the Fund). An item on the application form listed initial cash contributions as Investment Amounts, including personal contributions, employer contributions and rollovers. In filling out the application form, your client overlooked the instruction to complete a personal tax deduction notice in relation to deducting personal contributions. As a result, no 'Notice of intent to claim or vary a deduction for personal superannuation contribution form' was provided to the Fund. On a date after the 2013-14 income year, the Fund provided your client with a Contributions Summary Report which showed a concessional contribution. A further amount was listed as personal non-concessional contributions. Your client's tax return for the year ended 30 June 2014 was lodged sometime in the 2014-15 income year. You contend that your client's application form represented the provision of a valid notice in, substantially, the approved form. It is also contended that the subsequent receipt of the Contributions Summary Report from the Fund amounted to an acknowledgment of the client's notice.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 26-55(2), | 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 section 290-175, | Income Tax Assessment Act 1997 section 995-1, | Taxation Administration Act 1953 section 388-50, and | Superannuation Guarantee (Administration) Act 1992 section 12.

Reasons for decision: Detailed Reasoning - Summary of decision: Your client has not provided a valid notice of their intention to claim a deduction as the application form completed is not substantially in the approved form for the purposes of Section 290-170 of the ITAA 1997. | Detailed Reasoning - Personal superannuation contributions made in the 2013-14 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 Income Tax Assessment Act 1997 (ITAA 1997), provided certain conditions are met. It is important to note, that the current test for the deductibility of personal superannuation contributions does not include the level of employer superannuation support a person receives or should have received. 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. Furthermore, the notice must be given either before you lodge your income tax return, or if you have not yet lodged your income tax return before the end of the year following the year the contributions were made. Subsection 290-170(3) of the ITAA 1997 provides that the trustee must , without delay , give you an acknowledgement of a valid notice. A trustee may refuse to give acknowledgment of receipt of a valid notice in the circumstances described in subsection 290-170(4) of the ITAA 1997. Taxation Ruling TR 2010/1 entitled 'Income Tax: Superannuation contributions' (TR 2010/1) sets out the Commissioner's view on deductions for personal superannuation contributions only discusses when a notice will be invalid and not when one will be valid. Therefore, it is assumed that if a notice does not fall into one of these categories, that is to be 'not valid', it is a valid notice. Section 995-1 of the ITAA 1997 defines 'approved form' to have the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act 1953 (TAA). Section 388-50 of the TAA states: (1) A return, notice, statement, application or other document under a taxation law is in the approved form if, and only if: (a) it is in the form approved in writing by the Commissioner for that kind of return, notice, statement, application or other document; and (b) it contains a declaration signed by a person or persons as the form requires (see section 388-75); and (c) it contains the information that the form requires, and any further information, statement or document as the Commissioner requires, whether in the form or otherwise; and (d) for a return, notice, statement, application or document that is required to be given to the Commissioner - it is given in the manner that the Commissioner requires (which may include electronically). (1A) Despite subsection (1), a document that satisfies paragraphs (1)(a), (b) and (d) but not paragraph (1)(c) is also in the approved form if it contains the information required by the Commissioner. The Commissioner must specify the requirement in writing. Note from the above that the Commissioner must approve requirements in relation to a specific approved form in writing. The Commissioner can do this in the form of an 'Instrument of Approval' that accompanies the publishing of an approved form. The Commissioner's view on the production and content of Instruments of Approval is contained in Law Administration Practice Statement PS LA 2005/19 (PS LA 2005/19). The Commissioner has produced an approved form which can be used by superannuation fund members to advise their superannuation fund of their intention to claim a deduction for personal superannuation contributions. This form is the 'Notice of intent to claim or vary a deduction for personal super contributions ' (NAT 71121-06.2012). The superannuation fund member does not have to use this form, and can inform their superannuation fund of their intention in other ways, such as on a 'fund-branded' form or by providing their own letter/notice to the fund. The question which arises is whether such other notices are in the approved form for the purposes of satisfying section 290-170 of the ITAA 1997. During the 2013-14 income year, your client provided the Fund with an application form which listed the initial cash contributions to be made. Due to an oversight, your client did not provide the Fund with a 'Notice of intent to claim or vary a deduction for personal superannuation contribution form.' You have argued that the application form provided by your client to the Fund should be accepted as evidence of his intention to claim a deduction which he personally contributed and that it contains substantially all of the information required to be in the approved form. The application form, while providing relevant identifying information and clearly outlining your client's initial cash contributions into the Fund, does not contain all of the information requested on the NAT 71121-06.2012 form. Therefore the question has been raised as to whether this notice was in the 'approved form'. The application form does not contain information ascertaining your client's intention to claim a deduction for personal superannuation contributions. The checklist of the application form makes it clear that if you are intending to claim a deduction for personal contributions, you must complete a separate notice. This was overlooked by your client. As such, it can be concluded that the application form was not substantially in the approved form. Furthermore, the Fund has not acknowledged receipt of your client's intention to claim a deduction. The Contributions Summary Report received provides a summary of the personal non-concessional contributions and concessional employer contributions received, with no mention of any acknowledgment of your client's intention to claim a deduction for personal contributions.