Edited version of private ruling

Authorisation Number: 1011656838806

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Ruling

Subject: Deduction for personal superannuation contribution

Question 1

Can the Commissioner of Taxation allow an extension of time to lodge a 'notice of intent to deduct contributions' in relation to the 2008-09 income year, after the required time specified in section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

Question 2

Is your client entitled to claim a deduction in respect of a personal superannuation contribution for the 2008-09 income year under section 290-150 of the ITAA 1997?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2009.

The scheme commences on:

1 July 2008.

Relevant facts and circumstances

Your client, who is over preservation age, has a superannuation account in a complying superannuation fund (the fund).

A couple of days before the end of the 2009-10 income year, your client completed and signed a Notice of intent to claim or vary a deduction for personal super contributions (the notice) for the 2008-09 income year.

In this notice your client stated an intent to claim a tax deduction in respect of the personal contributions your client had made to the fund in the 2008-09 income year. When completing the notice your client also signed a declaration stating that your client was lodging the notice before both of the following dates:

· the day your client lodged an income tax return for this income year, and

· the end of the income year after the 2008-09 income year.

In mid-July 2010, your client sent the completed notice to your firm for it to be lodged with the fund on your client's behalf.

A couple of days later, your client's income tax return for the 2008-09 income year was lodged with the Australian Taxation Office (ATO). A deduction in respect of the personal contributions was claimed in the return for that income year.

Several days after the lodgment of your client's income tax return, your firm sent the notice to your client's financial adviser, who then lodged the notice with the fund on your client's behalf.

The fund subsequently advised your client that the notice was lodged late and that it should have been lodged by 30 June 2010.

An income tax assessment for the 2008-09 income year was issued to your client a number of days later, and the deduction was allowed in this assessment.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 290-150

Income Tax Assessment Act 1997 Subsection 290-150(2)

Income Tax Assessment Act 1997 Section 290-170

Income Tax Assessment Act 1997 Subsection 290-170(1)

Income Tax Assessment Act 1997 Paragraph 290-170(1)(a)

Income Tax Assessment Act 1997 Paragraph 290-170(1)(b)

Income Tax Assessment Act 1997 Paragraph 290-170(1)(c)

Income Tax Assessment Act 1997 Subsection 290-170(2)

Reasons for decision

Summary

A person can claim a deduction in respect of personal superannuation contributions made to a complying superannuation fund provided all the requirements of the legislation are met. One of those requirements is the lodgment of a notice of intent to claim a deduction in respect of personal superannuation contributions (the notice).

The notice must be lodged with the trustee of the relevant superannuation fund by no later than:

(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.

The Commissioner of Taxation does not have the discretion to allow an extension of this time in which to lodge the notice.

In your client's case, the notice of intent should have been given to the trustee of the fund by 30 June 2010. Therefore your client is not entitled to claim a deduction in respect of the personal contributions for the 2008-09 income year.

Detailed reasoning

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.

These conditions are explained in detail in Taxation Ruling TR 2010/1 Income Tax: superannuation contributions.

Notice of intent to deduct conditions

To be eligible for a deduction for a personal superannuation contribution, under section 290-170 of 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.

Paragraph 290-170(1)(b) of the ITAA 1997 states:

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;

In your client's case, the contributions were made during the 2008-09 income year. However, your client's income tax return for the 2008-09 income year was not lodged until mid-July 2010. Therefore, according to paragraph 290-170(1)(b) of the ITAA 1997, your client had until 30 June 2010 in which to lodge the notice of intent with the trustee of the Fund.

Unfortunately, the notice was not lodged with the trustee of the Fund until several days after the lodgment of your client's income tax return for the 2008-09 income year.

Consequently, the requirement under paragraph 290-170(1)(b) of the ITAA 1997 has not been met.

It is contended that your client was not aware of the requirement to lodge the notice by 30 June 2010, and therefore did not intentionally lodge the notice after this date.

However, it is noted that when your client completed the notice, your client also signed a declaration in which it is stated (amongst other things) that your client was lodging the notice before both of the following dates:

· the day your client lodged an income tax return for the year stated in the notice, and

· the end of the income year after the year stated in the notice.

The year stated in the notice was the financial year ended 30 June 2009.

The fact that your client prepared and signed the notice before the due date is not relevant in this instance. Similarly, the contention that your client was not aware of the need to lodge the notice before 30 June 2010 (notwithstanding that your client actually signed the declaration acknowledging this requirement) also is not relevant.

These circumstances do not alter the fact that your client did not provide the fund trustee with a valid notice of intent for the personal contributions by 30 June 2010.

Discretion

There is no provision in section 290-170 of the ITAA 1997 which extends the time limit specified in paragraph 290-170(1)(b) of the ITAA 1997 for lodging these notices.

Similarly, neither section 290-170 or any other provision of the ITAA 1997 gives the Commissioner the power to exercise a discretion to grant an extension of time for a person to lodge a valid notice under section 290-170 of the ITAA 1997.

Conclusion

As noted earlier, the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 must all be satisfied before a person can claim a deduction for the contributions made in that income year. In this case, the requirements of section 290-170 were not met. Therefore, your client is not entitled to claim a deduction in respect of the personal superannuation contributions made by your client during the 2008-09 income year.