Private ruling: Deductibility of personal superannuation contributions.
Published: November 2014
Date scheme commenced: 1 July 2013.

Ruling: Q1: Is a second notice of intent to deduct personal superannuation contributions given by a taxpayer (the Taxpayer) to the trustee of a superannuation fund (the Fund) a valid notice in accordance with subsection 290-170(2) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. This review applies for the following period Income year ended 30 June 2014. The scheme commenced on 1 July 2013.

Relevant facts and circumstances: The Taxpayer is a member of the Fund. In the income year ended 30 June 2014, the Taxpayer made personal superannuation contributions to the Fund. In the 2014-15 income year, the Taxpayer gave to the trustee of the Fund (the Trustee) a notice (the First Notice) of their intention to claim a tax deduction in respect of a portion of the contributions made in the 2013-14 income year. Immediately after giving the First Notice to the Trustee, the Taxpayer realised they had made an error in the amount of deduction stated on the notice. They had intended to claim a tax deduction for all the contributions made in 2013-14 income year. A few days later, the Taxpayer contacted the Fund to inform them that the First Notice was incorrectly completed and requested that it be cancelled. The Taxpayer was advised that the notice was already processed and could not be cancelled. Subsequently, the Taxpayer gave the Trustee another notice (the Second Notice) to claim a tax deduction for an additional amount of contributions (the difference between the full amount of contributions made and the amount stated on the First Notice). The Second Notice stated that it is not given to vary the First Notice. Subsequently, the Trustee advised the Taxpayer that they are only able to act on the First Notice and therefore, cannot accept the Second Notice. The Trustee also informed the Taxpayer that they cannot vary the First Notice to increase the amount claimed, nor can they revoke or withdraw the notice. The Taxpayer has not yet lodged their income tax return for the 2013-14 income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 290-150. | 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 Paragraph 290-170(2)(b). | Income Tax Assessment Act 1997 Section 290-180. Summary | In accordance with subsection 290-170(2) of the ITAA 1997, the Taxpayer can give the trustee of the Fund more than one valid notice for purposes of section 290-150 of the ITAA 1997. | Therefore, as all the conditions of subsection 290-170(2) of the ITAA 1997 are met, the Second Notice given by the Taxpayer to the trustee of the Fund is a valid notice for the purposes of section 290-150 of the ITAA 1997. | Detailed Reasoning | In accordance with section 290-150 of the ITAA 1997, a person can claim a deduction for a personal contribution they make to a superannuation fund if certain conditions, including the conditions in section 290-170 of the ITAA 1997, are met. | Section 290-170 of the ITAA 1997 provides that, to deduct a contribution, or part of the contribution, the person must give to the trustee of the fund a valid notice, in the approved form, of their intention to claim a deduction in respect of the contribution. | In accordance with subsection 290-170(1) of the ITAA 1997, the notice must be given to the trustee by the earlier of the date of the person's income tax return being lodged or the end of the income year following the year in which the contribution was made. | Relevantly, in accordance with subsection 290-170(2) of the ITAA 1997, a notice will be valid if the following conditions are satisfied: | • the notice is in respect of the contribution; | • the notice does not include all or part of an amount covered by a previous notice. | In this case, the First Notice given to the Trustee was in respect of an amount of personal contributions made by the Taxpayer to the Fund in the 2013-14 income year, and the amount of the deduction claimed was a part of that amount. As all the other conditions of subsection 290-170(2) of the ITAA 1997 were met, this notice is considered a valid notice for the purposes of section 290-150 of the ITAA 1997. | Referring to a valid notice, subsection 290-180 of the ITAA 1997, as far as relevant, states: | 290-180(1) You cannot revoke or withdraw a valid notice in relation to the contribution (or a part of the contribution). | 290-180(2) You can vary a valid notice, but only so as to reduce the amount stated in relation to the contribution (including to nil)… | Based on the above, the Taxpayer cannot revoke or withdraw the First Notice. Also, the Taxpayer cannot increase the amount stated in relation to the contribution covered by the First Notice. | However, on the wording of paragraph 290-170(2)(b) of the ITAA 1997, which requires a consideration of amounts covered by a previous notice , a person is not prevented from giving the trustee more than one notice. If a subsequent notice meets the requirements of subsection 290-170(2) of the ITAA 1997, the notice will be a valid notice for the purposes of section 290-150 of the ITAA 1997. | The Second Notice given by the Taxpayer to the Trustee was in respect of personal contributions made by the Taxpayer to the Fund in the 2013-14 income year. The amount stated on the notice was an amount which did not include all or part of the amount covered by the First Notice but was, in fact, an additional amount required to claim a deduction for the full amount of contributions made by the Taxpayer in the 2013-14 income year. | As all the other conditions of subsection 290-170(2) of the ITAA 1997 are satisfied, the Second Notice given by the Taxpayer to the Trustee is a valid notice for the purposes of section 290-150 of the ITAA 1997.