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Edited version of your written advice
Authorisation Number: 1051205276396
Date of advice: 24 March 2017
Ruling
Subject: Deductibility of personal superannuation contributions
Question
Can a person (the Taxpayer) claim a deduction for a proposed personal superannuation contribution made to a constitutionally protected fund?
Answer
No.
This ruling applies for the following period:
Income year ending 30 June 2018.
The scheme commences on:
1 July 2017.
Relevant facts and circumstances
The Taxpayer operates a private practice.
The Taxpayer is a member of a complying superannuation fund (the Fund).
The Fund is a constitutionally protected fund (CPF) administered by a State Government.
The Taxpayer will not be engaged in employment activities in the 20XX-YY income year.
The Taxpayer intends to contribute an amount (the Contribution) to the Fund in the 20XX-YY income year.
The Taxpayer intends to provide the trustee of the Fund with a valid notice of intent to claim a deduction for the proposed personal contribution to be made in the 20XX-YY income year. In response, the Taxpayer expects to receive an acknowledgement from the Fund for this notice.
The Taxpayer is less than 75 years of age.
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 290-165.
Income Tax Assessment Act 1997 section 290-170.
Income Tax Assessment Act 1997 section 295-15.
Income Tax Assessment Act 1997 section 295-190.
Reasons for decision
Summary
The Taxpayer cannot claim a deduction for personal superannuation contributions made to a CPF in the 20XX-YY income years as they do not satisfy all the conditions of section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997).
Detailed reasoning
Section 290-150 of the ITAA 1997 provides that an individual may deduct a contribution made to a superannuation fund for the purpose of providing superannuation benefits for themselves, or their dependants after their death.
However, section 290-150(2) of the ITAA 1997 states that all the conditions in section 290-155, 290-165 and 290-170 must also be satisfied for an individual to deduct a contribution made in that income year.
Complying superannuation fund
Subsection 290-155(1) of the ITAA 1997 requires that in order for an individual to claim a deduction for a personal contribution the contribution must be made to a complying superannuation fund (CSF).
Subparagraph 290-155(1)(a)(ii) defines a CSF as a superannuation fund that is not a superannuation fund that would not include the contribution in its assessable income under section 295-190 of the ITAA 1997.
Section 295-190 of the ITAA 1997 provides that contributions made to a CSF are included in the assessable income of those funds.
Division 295 of the ITAA 1997 sets out the rules on the taxation of superannuation entities.
Pursuant to section 295-15 of the ITAA 1997, tax is not imposed on property of any kind belonging to a State (within the meaning of section 114 of the Constitution). Section 114 of the Australian Constitution prohibits the Commonwealth from imposing a tax on property belonging to a state.
As the Fund is administered by a State Government, it is a CPF and does not include member contributions in its assessable income. Consequently, the Fund falls outside the definition of a complying superannuation fund in section 295-190 of the ITAA 1997.
Accordingly, the Taxpayer cannot claim a deduction for a personal superannuation contribution made to their Fund in the 20XX-YY income year.
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