Private ruling: Deduction for personal superannuation contributions
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2014

Ruling: Q1: Can you claim a deduction in respect of personal superannuation contributions made to a complying superannuation fund in the 2013-14 income year under section 290-150 of the Income Tax Assessment Act 1997 ? Advice/Answer Yes.

Relevant facts and circumstances: You state that due to health problems your employment with the company was to cease in the 2009-10 income year. From early 2010 you commenced receiving a benefit under a disability plan subject to you continuing to meet the requirements of the disability plan. Contributions to your superannuation plan ceased and no further company superannuation contributions were made on your behalf. You intend to make a personal superannuation contribution to your self-managed superannuation fund during the 2013-14 income years and claim a deduction for this. You confirm that the contributions are being made for the purpose of providing superannuation benefits to you or your dependants if you die before or after becoming entitled to the benefits. You will lodge a valid notice with the trustee of your self-managed superannuation fund and receive an acknowledgment of that notice. You confirm the proposed deduction for personal superannuation contributions will add to or create a loss. You state your income comprises only of income from the disability plan plus a small savings account in a Credit Union. You confirm that your previous employer pays no money into any superannuation plan on your behalf. You state you are not currently employed and receive no fringe benefits. You meet the age-related condition.

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 Subsection 290-150(2) | Income Tax Assessment Act 1997 Subsection 290-150(3) | 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(1) | Income Tax Assessment Act 1997 Subsection 290-170(3) | Taxation Administration Act 1953 Subsection 357-110(1)

Reasons for decision: Summary: You will be eligible to claim a deduction for the personal superannuation contributions you make to your self-managed superannuation fund as all of the conditions for deductibility have been met for the 2013-14 income year. | Detailed Reasoning - Personal deductible superannuation contributions:: A person can claim a deduction for personal contributions made to a superannuation fund for the purpose of providing superannuation benefits for themselves,(or their dependants after their death) under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997). However, the conditions in sections 290-155, 290-160, 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 contribution is made. In this case, you have advised you have made a contribution to your self-managed superannuation fund which, in the absence of evidence to the contrary, is a complying superannuation fund. Therefore, this requirement will be satisfied. | Detailed Reasoning - Maximum earnings as an employee condition:: The condition in section 290-160 of the ITAA 1997 requires that if a taxpayer is engaged in any activities that result in them being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA) then less than 10% of the total of their assessable income and reportable fringe benefits must be attributable to those activities. Subsection 290-160(1) states: This section 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 appointment; (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 has not been enacted). In your case, you ceased employment in the 2009-10 income year and commenced to receive a benefit from a disability plan. You advise that you are not currently employed. Consequently, section 290-160 of the ITAA 1997 does not apply in this instance. | 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. You meet this age-related condition. | 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 you lodge your 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, you must also have been given an acknowledgement of the notice by the trustee of the 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: o you are a member of the fund or the holder of the retirement savings account (RSA); o the trustee or RSA provider 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); o the trustee or RSA provider has not begun to pay a superannuation income stream based on the contribution; or · before the notice is given: o a contributions splitting application has not been made in relation to the contribution; and; o the trustee or RSA provider to which you made the application has not rejected the application. This condition is satisfied as you will lodge a valid notice with the trustee of your self-managed superannuation fund and receive an acknowledgment of that notice. | 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 years’ tax losses and any deductions for farm management deposits) from a taxpayer’s assessable income. Thus a deduction for personal superannuation contributions cannot add to or create a loss in the relevant income year the deduction is to be claimed. You confirm that the deduction for personal superannuation contributions you intend to claim under section 290-150 of the ITAA 1997 will not add to or create a loss in the 2013-14 income year. | Detailed Reasoning - Contribution limits and the concessional contributions cap:: Concessional contributions made to superannuation funds in the 2013-14 income year are subject to an annual cap of $35,000 for those aged 60 and over. Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a person. | Detailed Reasoning - Conclusion:: As all of the conditions for deductibility under section 290-150 of the ITAA 1997 have been satisfied in relation to the 2013-14 income year, you are entitled to claim a deduction for the personal superannuation contributions made to a complying superannuation fund in the 2013-14 income year.