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Edited version of private ruling
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Ruling
Subject: Superannuation management expenses
Question
Are you entitled to a deduction for management fees associated with your superannuation fund account?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2005
Year ended 30 June 2006
Year ended 30 June 2007
Year ended 30 June 2008
Year ended 30 June 2009
Year ended 30 June 2010
The scheme commenced on:
1 July 2004
Relevant facts and circumstances
You have a superannuation fund account.
The annual superannuation statement you have received shows management fees paid in relation to your account.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
Taxation Ruling TR 93/17 sets out the Commissioner's view on the income tax deductions that are available to superannuation funds. Paragraph 4 of TR 93/17 specifically states that administrative costs incurred in managing the fund are deductible by the superannuation fund.
In your case you have an account with a superannuation fund. You are the beneficial owner of the assets held in this account. The superannuation fund's trustee is the legal owner of the assets of the fund.
The transaction and management fees as set out on your annual statement have been incurred by the superannuation fund's trustee and not by you.
The superannuation fund is taxed on income earned on its investments, and the transaction and management fees, which are incurred by the fund in earning its assessable income, can only be claimed as a deduction by the fund.
Therefore, as the expenses have been incurred by the fund and not by you, you cannot claim a deduction in your income tax return for transaction and management fees relating to your superannuation fund account.