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Edited version of private ruling
Authorisation Number: 1011551132545
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Ruling
Subject: Deductibility of personal superannuation contributions
Question
Can the superannuation contribution made by the trustee of the trust at the direction of your client to a superannuation fund on 1 July 2009 for her benefit, be an allowable deduction for your client in the year ended 30 June 2009?
Answer
No
This ruling applies for the following period
1 July 2008 to 30 June 2010
The scheme commenced on
1 July 2008
Relevant facts and circumstances
Your client received an income distribution from a trust for the year ended 30 June 2009.
On the morning of 1 July 2009 the trustee of the trust, who had been unwell for a number of days, authorised the electronic transfer for an amount from the trust to a superannuation fund as a contribution for the benefit of your client.
By 'Memorandum of Resolution' dated 31 July 2009, the trustee of the trust resolved to pay a superannuation contribution for the benefit of your client as she was considered an employee of the trust. This was in respect of the contribution already paid on 1 July 2009.
In February 2010 the Deputy Commissioner of Taxation issued a 'Notice of Private Ruling' to the trustee for the trust advising that your client was not an employee of the trust and the trust could not claim an income tax deduction for the contribution.
In May 2010 your client advised the trustee of the superannuation fund she was intending to claim an income tax deduction for the contribution for the year ended 30 June 2009. On the same day the trustee acknowledged the notice of intention.
You have advised your client satisfies the necessary tests under sections 290-155 to 290-175 of the Income Tax Assessment Act 1997 (ITAA 97) to claim an income tax deduction for personal superannuation contributions for the year ended 30 June 2009.
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 Section 290-165
Income Tax Assessment Act 1997 Section 290-170
Reasons for decision
Summary
The contributions were not paid in the year ended 30 June 2009. There is no discretion in the ITAA 1997 to allow a deduction for personal contributions in a year where the contributions are paid in a different year.
Detailed reasoning
Under section 290-150 of the ITAA 1997 a person can claim a deduction for a personal contribution made to a superannuation fund for the purpose of providing superannuation benefits for themself provided the conditions in sections 290-150, 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 are satisfied.
In accordance with subsection 290-150(1) of the ITAA 1997 your client has made a contribution for the purpose of providing superannuation benefits for herself. This condition is satisfied.
You have also advised your client meets the necessary criteria set out in sections 290-155 to 290-170 of the ITAA 1997 for the year ended 30 June 2009. This satisfies the condition set out in subsection 290-150(2) of the ITAA 1997.
However, subsection 290-150(3) of the ITAA 1997 states:
You can deduct the contribution only for the income year in which you made the contribution.
The contribution was made on 1 July 2009 and therefore your client cannot claim a deduction for the contributions in year ended 30 June 2009.
Unfortunately the factors and circumstances as to why the contribution was made on 1 July 2009 and not 30 June 2009 are not relevant as the Commissioner has no discretion to treat the contributions as being paid in the earlier year. Accordingly, the contribution is paid on 1 July 2009 and can only be considered as a deduction in the 2010 year of income.
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