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Edited version of private ruling
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Ruling
Subject: deduction for personal superannuation contributions
Question:
Can you claim a deduction in the income year for personal superannuation contributions under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) which were receipted by the superannuation fund in the following income year?
Answer:
No
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commenced on:
1 July 2010
Relevant facts:
You are self employed as a partner of a business.
You are the member and the trustee of a complying self managed superannuation fund (the Fund) in the income year.
You instructed the financial institution to electronically transfer your personal contributions to the Fund, with the intention to claim a tax deduction for the amount in the current income year.
Your instructions were accepted by the financial institution, however, due to the oversight of the financial institution your personal superannuation contributions were not credited to the Fund until the future income year.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 290-150
Income Tax Assessment Act 1997 Subsection 290-150(3)
Reasons for decision
Summary
You are not entitled to claim a deduction in respect of personal contributions in the current income year as your personal contributions were not paid until the future income year.
Detailed reasoning
A person must satisfy the conditions in section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) before they can claim a deduction in respect of personal contributions made for the purpose of providing superannuation benefits for themselves, or their dependants after their death.
However, subsection 290-150(3) of the ITAA 1997 provides that a taxpayer may only deduct contributions in the income year in which they are made.
Taxation ruling TR 2010/1 (TR 2010/1) provides guidelines to ascertain when a superannuation contribution is made. Paragraph 12 of TR 2010/1 states that:
…as a general rule, the contribution will be made when the funds are received by the superannuation provider.
A specific rule in regards to the electronic transfer of funds is provided in Paragraph 13 of TR 2010/1:
If the funds are transferred by an electronic transfer of funds to the superannuation provider, a contribution is made when the funds are credited to the superannuation provider's account.
From the above, a fund member is only taken to have made a contribution to their superannuation fund when the superannuation fund receives it.
The legislation itself is quite specific. It allows a deduction, subject to the necessary requirements being met, only for the income year in which the contributions have been made.
Unfortunately, the factors and circumstance as to why the contributions were made in the future income year are not relevent as the Commissioner has no discretion to treat the contributions as being paid in the current income year. Accordingly, the contributions can only be considered as a deduction in the future income year.
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