Private ruling: Deduction for personal superannuation contribution
Ruling period: Year ended 30 June 2010
Date scheme commenced: 1 July 2009

Ruling: Q1: Can you claim a deduction in respect of a personal superannuation contribution for the 2009-10 income year under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: 

Relevant facts and circumstances: You are over 65 years of age but under the age of 75. You own a company. You are not only doing book keeping for your own company, you need to teach new employees how to do their job and you also perform the job yourself. You are a member of a complying superannuation fund (the Fund). Prior to 30 June 20XX, you wrote a cheque in respect of your personal superannuation contributions and posted it to the Fund. The Fund did not receive the cheque until after 1 July 20XX. You intend to provide a written notice of intent to claim a deduction to the Fund Trustee once it is known that a deduction can be claimed in respect of the contributions made in the 2009-10 income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 290-150. Income Tax Assessment Act 1997 Subsection 290-150(1). 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 Subsection 290-170(2). Income Tax Assessment Act 1997 Subsection 295-190(1). Income Tax Assessment Act 1997 Subsection 295-190(2). Superannuation Industry (Supervision) Regulations 1994 Regulation 7.01 Superannuation Industry (Supervision) Regulations 1994 Regulation 7.04 Summary | You are not entitled to claim a deduction for personal superannuation contributions for the 2009-10 income year as the contributions were not made to the superannuation fund until the following income year. | The Commissioner has no discretion to allow a deduction in an income year other than the one in which a superannuation contribution is made. | You may be entitled to a deduction for these contributions in the 2010-11 income year. | Detailed reasoning | Year of receipt of the contribution | A deduction allowable to a person for their personal superannuation contributions in the year in which the contribution is made. | Taxation Ruling TR 2010/1 (TR 2010/1) discusses at length the Commissioner of Taxation's view on how and when a contribution is made to a superannuation fund. | Paragraph 12 of TR 2010/1 states: | A superannuation fund's capital is most commonly increased by transferring funds to the superannuation provider and, as a general rule, the contribution will be made when the funds are received by the superannuation provider. | Furthermore, paragraphs 189, 190 and 191 of TR 2010/1 states: | 189. Subject to the qualification in paragraphs 190 and 191 of this Ruling, if a cheque is post-dated (that is, it is payable on a date later than the day on which the cheque is received by the superannuation provider) or a promissory note is payable on a date later than the day on which the note is received, the contribution will be made on the later of the day the cheque or note is received and the date on which payment can be demanded as shown on the cheque or note. Payment on such instruments cannot be demanded before the date shown. Again, no contribution will have been made if the instrument is not honoured. | 190. In the case of a personal cheque or a promissory note that is contributed by the maker, the Commissioner will treat the contribution as being made when the cheque or note received by the superannuation provider only if the superannuation provider promptly presents the cheque or note for payment and the cheque or note is honoured with cash (or its electronic equivalent). | 191. In circumstances where such a personal cheque or promissory note is not promptly dealt with, the Commissioner will treat a contribution as having been made only once the superannuation provider has obtained payment in cash (or its electronic equivalent). | It is clear from the above that a fund member is only taken to have made a contribution to their superannuation fund when the trustee of superannuation fund receives it. | In the present case, deductible superannuation contributions were intended to be made to a complying superannuation fund (the Fund) prior to 30 June 2010. Due to unforseen circumstances, the superannuation contributions were received by the Fund after 1 July 2010. | It is a question of fact that the contributions were received by the trustee of the Fund in the 2010-11 income year. Accordingly, the year of receipt of the contributions is the 2010-11 income year and not the 2009-10 income year. | Deduction for a personal superannuation contribution in the 2009-10 income year | A taxpayer can claim a deduction, under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997), for a personal contribution they make to a superannuation fund in a particular income year for the purpose of providing superannuation benefits for themselves, provided the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 are satisfied. An individual is eligible to claim a deduction for a superannuation contribution only if that contribution: | · is made in order to obtain super benefits for themself, or for their dependants in the event of their death (subsection 290-150(1) of the ITAA 1997); | · is made to a complying superannuation fund (section 290-155 of the ITAA 1997); | · satisfies the 'maximum earnings as an employee' condition (section 290-160 of the ITAA 1997); | · meets the age-related conditions (section 290-165(2) of the ITAA 1997); | · is covered by a notice written to their super fund or RSA provider, in the form approved by the Commissioner and advising the amount that will be claimed as a deduction (section 290-170 of the ITAA 1997); and | · the super fund or RSA provider has acknowledged their notice of intent and agreed to the amount to be claimed as a deduction (section 290-170(2) of the ITAA 1997). | In addition, the deduction you intend to claim for the contributions must not add to or create a loss. | As discussed above, a deduction under section 290-150 of the ITAA 1997 will be allowable only in the income year in which the payment is actually received by the trustee of the fund. | Whether or not the intention was for the payment to be made on or before 30 June 2010 is not relevant. What is relevant is whether or not the contribution was received by the trustee of the superannuation fund by 30 June 2010. | It is clear from the facts in this case that the contributions were received by the trustee of the Fund after 1 July 2010. Therefore these superannuation contributions were made in the 2010-11 income year. | Further to the above, it should be noted that the Commissioner has no discretion to allow a deduction for superannuation contributions in an income year other than the one in which they are made. The Commissioner can only exercise, or refuse to exercise, a discretion when he is given that discretion in the legislation that he administers. | Deduction for a personal superannuation contribution in the 2010-11 income year | Please note you may be entitled to claim a deduction under section 290-150 of the ITAA 1997 for the personal superannuation contributions you made to the complying superannuation fund in the 2010-11 income year if you satisfy all the requirements set out in subdivision 290-C that are listed above. | You should also be aware that a superannuation fund can only accept contributions in respect of a member aged over 65, but under 75 years, where certain conditions are met. | One of these conditions is satisfying the work test where: | · the contribution must be made no later than 28 days after the member turned 75 years of age; and | · during the income year in which the contribution is made, the member must be gainfully employed for at least 40 hours in a period of no more than 30 consecutive days.


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