Private ruling: Personal superannuation contribution deduction
Published: August 2014
Ruling period: 2012-13 income year
Date scheme commenced: 1 July 2012.

Ruling: Q1: Is the taxpayer entitled to claim a deduction for personal superannuation contributions in the 2012-13 income year where the notice of intent to deduct under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) has been lodged with the relevant superannuation fund trustee after 30 June 2014? | A1: No. | Q2: Will the Commissioner extend the time in which the taxpayer can lodge notices of intent to deduct under section 290-170 of the ITAA 1997? | A2: No.

Relevant facts and circumstances: Your client is a self-employed contractor. During the 2012-13 income year, your client made personal superannuation contributions to their superannuation fund (the Fund) of $[amount]. Your client expected to receive a pre-filled notice of intent to claim a deduction for personal superannuation contributions (a pre-filled notice) from the Fund. He did not receive a pre-filled notice. In July 20XX, your client was advised to complete the ATO form 'Notice of intent to claim or vary a deduction for personal super contributions' (the Notice). In July 20XX, your client completed and forwarded the Notice to the Fund. The Fund informed your client that it could not accept the Notice. Your client was unaware of the strict timeframe required by legislation to lodge a valid notice of intent to claim a deduction. As of 30 June 20XX, your client had not lodged their 20YY income tax return as they were awaiting confirmation of acceptance of the Notice from the Fund. Your client remains in accumulation phase in the Fund and has not commuted their account to an income stream nor made any withdrawals.

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 290-170. | Income Tax Assessment Act 1997 Subsection 290-170(1). | Income Tax Assessment Act 1997 Subsection 290-170(2).

Reasons for decision: Summary: Your client's notice of intent to claim a deduction, for the personal contribution made to the Fund in the 20YY income year, was not made within the timeframe required by legislation. The Notice did not meet the required timeframe as it was not lodged at the end of the 20XX income year. Further, the Commissioner does not have the power to exercise discretion to grant an extension of time for a person to lodge a notice of intent. As such, your client cannot claim a deduction for personal contributions made in the 20YY income year. | Detailed Reasoning - Deductions for personal superannuation contributions: A person must satisfy the conditions in section 290-150 of the ITAA 1997 before they can claim a deduction in respect of personal contributions made for the purpose of providing superannuation benefits for themselves, or their dependants after their death. Further, 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' . | Detailed Reasoning - Notice of intent to deduct conditions: Section 290-170 of the ITAA 1997 requires a person to provide a valid notice of their intention to claim the deduction to the trustee of their superannuation fund. The notice must be given before the earlier of: _ the date the person lodges their income tax return for the income year in which the contribution was made; or _ the end of the income year following the year in which the contribution was made. In addition, the person must also have been given an acknowledgement of the notice by the trustee of the superannuation fund. In this case, your client made a personal contribution of $[amount] in the 20YY income year to their superannuation fund (the Fund). Your client expected and requested for a pre-filled notice to be provided by the Fund prior to the end of the 20YY income year. However, the Fund did not provide a pre-filled notice and instead advised your client to complete the form, 'Notice of intent to claim or vary a deduction for personal super contributions', themself. In the 20ZZ income year, your client completed and provided the Notice to the Fund which was subsequently rejected. This date your client provided the Notice to the Fund was after the end of the income year following the year in which the contribution was made. The last possible date for your client to lodge a valid notice of intent was 30 June 20YY. Accordingly, the Notice did not meet the requirements under subparagraph 290-170(1)(a)(ii) of the ITAA 1997. In light of the foregoing, it is evident that the notice of intent to deduct requirement under section 290-170 of the ITAA 1997 has not been met. | Detailed Reasoning - A deduction is not allowable for your client's personal contribution: As noted earlier, the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 of the ITAA 1997 must all be satisfied before a person can claim a deduction for the contributions made in that income year. As noted above, the requirements of section 290-170 of the ITAA 1997 were not met. Consequently, your client is not entitled to claim a deduction in respect of the personal contribution of $[amount] they made to the Fund in the 20YY income year. | Detailed Reasoning - Discretion: Section 290-170 of the ITAA 1997 does not give the Commissioner the power to exercise discretion to allow a deduction where any of the requirements of this provision have not been satisfied, regardless of the reasons those requirements were not met, or the extent to which those reasons were beyond a taxpayer's control. The Commissioner also does not have the power to exercise discretion to grant an extension of time for a person to lodge a notice of intent under section 290-170. | Detailed Reasoning - Conclusion: As the notice of intent to deduct conditions have not been satisfied, the personal contribution your client made to the Fund during the 20YY income year is not deductible under section 290-150 of the ITAA 1997.