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Edited version of private advice
Authorisation Number: 1051934290028
Date of advice: 16 December 2021
Subject: Deductibility of personal superannuation contributions
Can your client claim a tax deduction for personal superannuation contributions made in the 20XX-XX income year under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)?
This private ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
During the 20XX-XX income year your client contributed an amount into their complying superannuation fund.
During that income year the business operated by your client experienced a considerable downturn in occupancy. With a large proportion of customers coming from overseas they experienced a 100% reduction. Together with domestic lockdowns and increasing uncertainty he experienced a lot of cancellations and shorter stays with their domestic customers. These factors led to reduction of income, increasing workload due to shorter stays and increased stress and subsequent mental health issues.
Further, the Covid-19 pandemic placed you under unprecedented pressures and you were unable to inform your client that he would be in a financial position where he could claim a tax deduction for his superannuation contribution, which meant he did not notify his superannuation fund prior to 30 June 20XX.
Considering the exceptional circumstances that all of Australia is experiencing at present you have requested that an exemption be given to your client so he can still notify his superannuation fund that he intends to claim a deduction for his personal superannuation contribution made for the 20XX-XX income year and then claim that deduction in his 20XX-XX income tax return.
Your client has not lodged their tax return for the 20XX-XX income year.
Your client has not lodged their Notice of Intent to claim a deduction to their complying superannuation fund.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 290-150
Income Tax Assessment Act 1997 section 290-170
Reasons for decision
Notice of intent to deduct conditions
Section 290-150 of the ITAA 1997 states that you can deduct a contribution you make to a superannuation fund or a retirement savings account for the purposes of providing superannuation benefits for yourself, in the income year that the contribution was made, provided all of the following conditions are satisfied:
• the complying superannuation fund conditions under section 290-155 of the ITAA 1997;
• if applicable, the maximum earnings as employee condition under section 290-160 of the ITAA 1997;
• the condition that a contribution is not a downsizer contribution under section 290-167 of ITAA 1997.
• the condition that a contribution is not a re-contribution under first home super saver scheme under section 290-168 of the ITAA 1997.
• the condition that a contribution is not a re-contribution of a Covid-19 early release amount under section 290-169 of the ITAA 1997
• age-related conditions under section 290-165 of the ITAA 1997; and
• the notice of intent to deduct conditions under section 290-170 of the ITAA 1997.
Section 290-170 of the ITAA 1997 relevantly states:
(1) To deduct the contribution, or a part of the contribution:
(a) you must give to the trustee of the fund or the RSA provider a valid notice, in the approved form, of your intention to claim the deduction; and
(b) the notice must be given before:
(i) if you have lodged your income tax return for the income year in which the contribution was made on a day before the end of the next income year - the end of that day; or
(ii) otherwise - the end of the next income year; and
(c) the trustee or provider must have given you an acknowledgment of receipt of the notice.
To claim a tax deduction for contributions your client made to their superannuation fund, they must give the trustee of the fund a notice of intent before 30 June 20XX. In addition, the trustee or provider must have given your client an acknowledgment of receipt of the notice. As your client has yet to provide the notice of intent to claim a deduction to their fund and the trustee of the fund has not acknowledged receipt of the notice, the conditions under paragraph 290-170(1)(b) and 290-170(1)(c) have not been satisfied. Therefore, the conditions under section 290-150 of ITAA 1997 have not been satisfied. As a result, your client cannot claim a tax deduction for superannuation contributions made in the 20XX-XX income year.