| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011639249487
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Variation of notice made under section 290-170
Can a notice made under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) be varied to Nil when a deduction has not been claimed as it was not allowable?
No.
This ruling applies for the following period:
Year ended 30 June 2008
The scheme commenced on:
1 July 2007
Relevant facts:
You made a personal contribution the superannuation fund (the Fund) in the 2007-08 income year.
The Fund is an Australian complying superannuation fund.
Early in the 2008-09 income year you provided the Fund a valid notice, with the intention to claim a tax deduction for the personal contribution in the 2007-08 income year.
The Fund accepted your notification. Consequently, tax representing 15% of the contribution was debited from your superannuation account.
Your income tax return for the 2007-08 income year was lodged prior to 30 June 2009.
However, a tax deduction for the personal contribution was not claimed in the 2007-08 income tax return as you did not meet the maximum earnings as employee condition (the '10% rule') under section 290-160 of the ITAA 1997.
During the 2010-11 income year, you provided the Fund a notice to vary the original notice, intending to reduce the amount stated in relation to the contribution to Nil.
Your application was refused by the Fund as the variation notice was provided after 30 June 2010, being the end of the income year following the income year in which the contribution was made.
Reasons for decision
Summary
The original notice of intention to claim a deduction cannot be varied after:
(a) 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
(b) otherwise - the end of the next income year.
In your case, your 2007-08 income tax return was lodged prior to 30 June 2009 and the variation notice was not provided to the trustee of the Fund until the 2010-11 income year. Therefore, you cannot vary the amount stated in the original notice of intention to Nil.
Further, as you did not claim a deduction in your 2007-08 income tax return for the personal superannuation contribution stated in the original notice of intention, the exception to this rule does not apply.
Deductions for personal superannuation contributions
A person must satisfy the conditions in section 290-150 of the 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.
Further, subsection 290-150(2) of the ITAA 1997 provides that the conditions in sections 290-155, 290-160, 290-165 and 290-170 must all be satisfied before a person can claim a deduction for the contributions made in that income year.
In this case, you have advised that the total of your income attributable to employment activities exceeded 10% of your total income for the 2008-09 income year. Consequently, the condition under section 290-160 of the ITAA 1997 is not satisfied.
As the conditions are not all been satisfied, you are not eligible to claim a deduction for the personal superannuation contribution made in the 2008-09 income year.
Variation of a valid notice made under section 290-170 of the ITAA 1997
To be eligible for a deduction for a personal superannuation contribution, under section 290-170 of the ITAA 1997, a person must give a valid notice of their intention to claim the deduction to the trustee of their superannuation fund, and must receive an acknowledgment of receipt of the notice. However, under subsection 290-180(2), the valid notice may be varied so as to reduce the amount stated in relation to the contribution (including to nil).
Under subsection 290-180(3) of ITAA 1997, a valid notice can only be varied before:
(a) 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
(b) otherwise - the end of the next income year.
In your case, early in the 2008-09 income year, you provided the Fund a valid notice, with the intention to claim a tax deduction for the personal contribution in the 2007-08 income year.
The Fund accepted your notification. Consequently, tax representing 15% of the contribution was debited from your superannuation account.
Your income tax return for the 2007-08 income year was lodged prior to 30 June 2009. However, a tax deduction for the personal contribution was not claimed in the 2007-08 income tax return as you did not meet the maximum earnings as employee condition (the '10% rule') under section 290-160 of the ITAA 1997.
With the intention to reduce the contribution stated in the original notice to Nil, you provided the Fund a variation notice during the 2010-11 income year.
As the variation notice was provided to the Fund after the lodgement date of your 2007-08 income tax return, subsection 290-170(3) of the ITAA 1997 prevents the original notice from being varied.
It should be noted that an exception to the application of subsection 290-180(3) of the ITAA 1997 is contained in subsection 290-180(4), which states:
Subsection (3) does not apply to a variation if:
(a) you claimed a deduction for the contribution (or a part of the contribution), and
(b) the deduction is not allowable (in whole or in part), and
(c) the variation reduces the amount stated in relation to the contribution by the amount not allowable as a deduction.
In order for the exception to apply all the conditions of subsection 290-180(4) of the ITAA 1997 must be satisfied.
However, as you did not claim a deduction for the contribution stated in the original notice, paragraph 290-180(4)(a) of the ITAA 1997 will not be satisfied. Consequently, subsection 290-180(4) will not apply.
Therefore, you cannot vary the original notice you made under section 290-170 of the ITAA 1997.