Private ruling: Deductibility of personal superannuation contributions
Date of advice: 24 March 2017
Published: August 2017
Ruling period: Income year ending 30 June 2018.
Date scheme commenced: 1 July 2017.

Ruling: Q1: Can a person (the Taxpayer) claim a deduction for a proposed personal superannuation contribution made to a constitutionally protected fund? | A1: No.

Relevant facts and circumstances: The Taxpayer operates a private practice. The Taxpayer is a member of a complying superannuation fund (the Fund). The Fund is a constitutionally protected fund (CPF) administered by a State Government. The Taxpayer will not be engaged in employment activities in the 20XX-YY income year. The Taxpayer intends to contribute an amount (the Contribution) to the Fund in the 20XX-YY income year. The Taxpayer intends to provide the trustee of the Fund with a valid notice of intent to claim a deduction for the proposed personal contribution to be made in the 20XX-YY income year. In response, the Taxpayer expects to receive an acknowledgement from the Fund for this notice. The Taxpayer is less than 75 years of age.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 290-150. | Income Tax Assessment Act 1997 section 290-155. | Income Tax Assessment Act 1997 section 290-165. | Income Tax Assessment Act 1997 section 290-170. | Income Tax Assessment Act 1997 section 295-15. | Income Tax Assessment Act 1997 section 295-190.

Reasons for decision: Summary: The Taxpayer cannot claim a deduction for personal superannuation contributions made to a CPF in the 20XX-YY income years as they do not satisfy all the conditions of section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997). | Detailed Reasoning - Detailed reasoning: Section 290-150 of the ITAA 1997 provides that an individual may deduct a contribution made to a superannuation fund for the purpose of providing superannuation benefits for themselves, or their dependants after their death. However, section 290-150(2) of the ITAA 1997 states that all the conditions in section 290-155, 290-165 and 290-170 must also be satisfied for an individual to deduct a contribution made in that income year. | Detailed Reasoning - Complying superannuation fund: Subsection 290-155(1) of the ITAA 1997 requires that in order for an individual to claim a deduction for a personal contribution the contribution must be made to a complying superannuation fund (CSF). Subparagraph 290-155(1)(a)(ii) defines a CSF as a superannuation fund that is not a superannuation fund that would not include the contribution in its assessable income under section 295-190 of the ITAA 1997. Section 295-190 of the ITAA 1997 provides that contributions made to a CSF are included in the assessable income of those funds. Division 295 of the ITAA 1997 sets out the rules on the taxation of superannuation entities. Pursuant to section 295-15 of the ITAA 1997, tax is not imposed on property of any kind belonging to a State (within the meaning of section 114 of the Constitution). Section 114 of the Australian Constitution prohibits the Commonwealth from imposing a tax on property belonging to a state. As the Fund is administered by a State Government, it is a CPF and does not include member contributions in its assessable income. Consequently, the Fund falls outside the definition of a complying superannuation fund in section 295-190 of the ITAA 1997. Accordingly, the Taxpayer cannot claim a deduction for a personal superannuation contribution made to their Fund in the 20XX-YY income year.