Private ruling: Deductibility of personal superannuation contributions
Date of advice: 19 April 2016
Published: June 2016
Ruling period: Income year ended 30 June 2015
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can the Taxpayer claim a deduction personal superannuation contributions made to a Fund under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: 1. The Taxpayer is under age 75. 2. The Taxpayer is a member of the Fund. 3. The Fund is a complying superannuation fund. 4. The Taxpayer ceased employment in the relevant income year and has not undertaken any further employment. 5. In the subsequent income year, the Taxpayer's final entitlements were deposited into the Taxpayer's an account by the Employer. 6. No superannuation contributions were made by the Employer for the taxpayer after 30 June 20XX. 7. The Taxpayer made a personal superannuation contribution to the Fund in the subsequent income year. 8. The Taxpayer has provided a written notice to the trustee of the Fund stating their intention to claim a deduction for personal superannuation contributions made in the relevant income year. 9. The Fund has provided acknowledgment of receipt of the written notice.

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 290-160 | Income Tax Assessment Act 1997 Subsection 290-160(1) | Income Tax Assessment Act 1997 Section 290-165 | Income Tax Assessment Act 1997 Subsection 290-165(2) | Income Tax Assessment Act 1997 Section 290-170 | Superannuation Guarantee (Administration) Act 1992

Reasons for decision: Summary: The Taxpayer can deduct the personal superannuation contribution made to the Fund in the subsequent income year. | Detailed Reasoning - Detailed reasoning: 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 ITAA 1997. However, the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 of the ITAA 1997 must also be satisfied for the person to claim the deduction. | Detailed Reasoning - Complying superannuation fund condition: The condition in section 290-155 of the ITAA 1997 requires that where the contribution is made to a superannuation fund, it must be made to a 'complying superannuation fund' for the income year of the fund in which the Taxpayer made the contribution. The Fund is a complying superannuation fund; therefore, this condition is satisfied. | Detailed Reasoning - Maximum earnings as employee condition: According to subsection 290-160(1) of the ITAA 1997, the maximum earnings as employee condition only applies if: (a) in the income year in which you make the contribution, you engage in any of these activities: (i) holding an office or appointment; (ii) performing functions or duties; (iii) engaging in work; (iv) doing acts or things; and (b) the activities result in you being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (assuming that subsection 12(11) of that Act had not been enacted). As the Taxpayer ceased employment in the relevant income year, and did not engage in any employment activities during the subsequent income year, section 290-160 of the ITAA 1997 does not apply. | Detailed Reasoning - Age-related conditions: Under subsection 290-165(2) of the ITAA 1997 the ability to claim a deduction ceases for contributions that are made after 28 days from the end of the month in which the person making the contribution turns 75 years of age. As the Taxpayer was under 75 years of age at all times in relation to the relevant income year, this condition is satisfied. | 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 relevant superannuation fund. A notice will be valid as long as the following conditions apply: • the notice is in respect of the contributions; • the notice is not for an amount covered by a previous notice; • at the time when the notice is given: • the person is a member of the fund; or • the trustee of the fund holds the contribution (for example, a notice will not be valid if a partial roll over of the superannuation benefit which includes the contribution covered in the notice has been made); or • the trustee of the fund has not begun to pay a superannuation income stream based on the contribution; • before the notice is given: • a contributions splitting application has not been made in relation to the contribution; and • the trustee of the fund has not rejected the application. The Taxpayer has provided a written notice to the trustee stating their intention to claim a deduction for the relevant contribution, and has received acknowledgment of the notice from the trustee. | Detailed Reasoning - Deduction limits: The allowable deduction is limited under subsection 26-55(2) of the ITAA 1997 to the amount of assessable income remaining after subtracting all other deductions (excluding previous year's tax losses and any deductions for farm management losses) from a taxpayer's assessable income.