Private ruling: Exercise of Commissioner discretion - section 291-465 of the Income Tax Assessment Act 1997
Published: March 2015

Ruling: Q1: If you were to make a personal concessional contribution to the Fund in the 20XY financial year will the Commissioner exercise his discretion in section 291-465 of the Income Tax Assessment Act 1997 (ITAA1997) to reallocate the contribution to the 20XX financial year? Advice No. Please see Reasons for decision below.

Relevant facts and circumstances: Your advice is based on the facts stated in the description of the scheme that is set out below. If your circumstances are significantly different from these facts, this advice has no effect and you cannot rely on it. The fact sheet has more information about relying on ATO advice. You intended to make a personal concessional contribution to your self managed super fund (SMSF) in the 20XX financial year. Due to some financial difficulties, you did not manage to make that contribution in 20XX financial year. You recovered from the financial difficulties in 20XY and now are ready to contribute the money, which is money for the intended 20XX contribution, into your SMSF in 20XY financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 291-465 We followed these ATO view documents: | Taxation Ruling TR 2010/1 | Other references: | Law Administration Practice Statement PS LA 2008/1

Reasons for decision: Summary: When applying the facts of your case to the law, we do not consider that 'special circumstances' exist or that it is consistent with the object of the ECT law for us to make a determination. | Detailed Reasoning - Detailed reasoning: Taxation Ruling TR 2010/1 states the Commissioner's views on when a contribution is made. The general rule is that a superannuation contribution is made when the capital of the superannuation fund is increased. In your case, the personal concessional contribution, which was to be a monetary fund transfer, would be made when the money was physically received by the fund. Further, subsection 290-150(3) of the ITAA 1997 states that you can deduct such a personal concessional contribution only for the income year in which you made the contribution. When making a decision about your case, we followed Law Administration Practice Statement PS LA 2008/1 The Commissioner's discretion to disregard or reallocate concessional and non-concessional contributions for a financial year (PS LA 2008/1). PS LA 2008/1 states that when making a decision about your application, we must be satisfied 'special circumstances' exist to disregard or allocate an amount of your contributions and that it is consistent with the object of the ECT law to make a determination. The object of Division 291 of the ITAA 1997 is to ensure that the amount of concessionally taxed superannuation benefits that a person receives, results from contributions that have been made gradually over a person's lifetime. Special circumstances are factors which are unusual or out of the ordinary and justify us making an exception to the general application of the law because taxing your excess contributions would be unjust, unreasonable or otherwise inappropriate. There is no strict formula or checklist to work out what special circumstances are, so each case will be considered on its own merits. In making the determination we may also consider: • whether the contributions would be more appropriately allocated to another financial year • whether it was reasonably foreseeable that you would have excess contributions when a contribution was made • any other relevant factors. Reasonably foreseeable is determined objectively on a case by case basis. It does not involve what an individual actually foresaw at the time the contributions were made. Instead it considers what an individual reasonably could have foreseen in their circumstances. | Detailed Reasoning - In your case:: In your application you contend there are special circumstances because due to financial circumstances you were unable to make the contribution in the 20XW - XX financial year. Now that your circumstances have improved you wish to make the contribution in the 20XX - XY financial year but have it counted as if it were made in the previous year. When applying the facts of your case to the law, we do not consider that 'special circumstances' exist or that it is consistent with the object of the ECT law for us to make a determination. Consequently, if you were to proceed with your proposed contribution the Commissioner will not exercise the discretion under paragraph 291-465(1)(b) of the ITAA 1997 to allocate the contribution contributions to the 20XW-XX financial year.