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Ruling

Subject: Deduction for personal superannuation contributions.

Issue 1

Question

Can the Commissioner grant an extension of time to lodge a valid notice of intent under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of the contributions made in the 2009-10 income year?

Issue 2

Question

Will your client be able to claim a deduction for personal superannuation contributions in the 2009-10 income year under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Issue 1

Answer

No.

Issue 2

Answer

No.

This ruling applies for the following period

Year ended 30 June 2010.

The scheme commenced on

1 July 2009.

Relevant facts and circumstances

Your client made a personal superannuation contribution to their nominated superannuation fund during the 2009-10 income year.

Your client signed a notice under section 290-170 of the ITAA 1997 prior to the due date notifying the fund of her intention to claim a tax deduction for the contribution.

Your client was later advised by her superannuation fund that the abovementioned contribution has been treated as a personal member contribution and that it would count towards her non-concessional contributions cap for the 2009-10 income year.

You advise the amount should have been treated as a concessional contribution during the 2009-10 income year as your client has claimed an income tax deduction for the contribution.

Your client requests that the statutory declaration be accepted as a replacement of the previous notice lodged and that her taxable income not be amended for the 2009-10 income year.

Relevant legislative provisions

Section 290-150 of the Income Tax Assessment Act 1997

Subsection 290-150(1) of the Income Tax Assessment Act 1997

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

Subsection 290-150(3) of the Income Tax Assessment Act 1997

Section 290-155 of the Income Tax Assessment Act 1997

Section 290-160 of the Income Tax Assessment Act 1997

Section 290-165 of the Income Tax Assessment Act 1997

Section 290-170 of the Income Tax Assessment Act 1997

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

Subsection 290-170(3) of the Income Tax Assessment Act 1997

Subsection 292-20(2) of the Income Tax (Transitional Provisions) Act 1997
Section 12 of the Superannuation Guarantee (Administration) Act 1992
Subsection 12(11) of the Superannuation Guarantee (Administration) Act 1992
Subsection 357-110(1) Taxation Administration Act 1953

Reasons for decision

Summary

Your client will not be eligible to claim a deduction for the personal superannuation contributions she made to her nominated superannuation fund as not all of the conditions for deductibility were met for the 2009-10 income year.

Detailed reasoning

Issue 1

Section 388-55 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953), provides 'the Commissioner may defer the time within which an approved form is required to be given to the Commissioner or to another entity. 'To determine whether the Commissioner can apply such discretion to the lodgement of a notice under section 290-170 of the ITAA 1997, the reasoning applied by the Full Federal Court in M W McIntosh V Federal Commissioner of Taxation is considered.

In applying this reasoning, it is considered that the language and context of section 290-170 of the ITAA 1997 and section 388-55 of Schedule 1 to the TAA 1953 indicate that the Commissioner does not have power under section 388-55 to extend the time for the lodgement of the relevant notice under section 290-170.

It is considered that the restrictive nature of section 290-170 of ITAA 1997 together with the language used, indicates the legislative intention to set a fixed time period for lodgement of this notice.

Further, no extension of time for lodgement of the notice is provided for by the section and there is no reference or mention by way of statutory 'Note' to section 388-55.

Based on the reasoning applied in M W McIntosh V Federal Commissioner of Taxation, in terms of the context and language used in the abovementioned sections, the Commissioner does not have the power under section 388-55 of TAA 1953 to extend the time for the lodgement of the notice of intent under section 290-170 of ITAA 1997.

Issue 2

Personal deductible superannuation contributions:

A person can claim a deduction for personal contributions made to a superannuation fund for the purpose of providing superannuation benefits for themselves,(or their dependants after their death) under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997).

However, the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 must be satisfied for the person to claim the deduction.

According to the facts, the conditions in section 290-170 have not been met. This will be discussed in further detail below.

Notice of intent to deduct conditions

Section 290-170 of the ITAA 1997 requires a person to provide a valid notice of their intention to claim the deduction to the trustee of their superannuation fund. The notice must be given before the earlier of:

o the date they lodge their income tax return for the income year in which the contribution was made; or

o the end of the income year following the year in which the contribution was made.

In addition, they must also have been given an acknowledgement of the notice by the trustee of the superannuation fund.

A notice will be valid as long as the following conditions apply:

o the notice is in respect of the contributions;

o the notice is not for an amount covered by a previous notice;

o at the time when the notice is given:

o they are a member of the fund or the holder of the retirement savings account (RSA);

o the trustee or RSA provider holds the contribution (for example, a notice will not be valid if a partial roll-over of the superannuation benefit which includes the contribution covered in the notice has been made);

o the trustee or RSA provider has not begun to pay a superannuation income stream based on the contribution; or

o before the notice is given:

o a contributions splitting application has not been made in relation to the contribution; and;

o the trustee or RSA provider to which you made the application has not rejected the application.

As stated above, the Commissioner does not have the power under section 388-55 of TAA 1953 to extend the time for the lodgement of the notice of intent under section 290-170 of ITAA 1997. As such, the statutory declaration provided by your client to replace the original notice of intent is not valid as it was presented after your client's 2009-10 income tax return had been lodged.

More importantly, your client's superannuation fund did not provide acknowledgment of a valid notice under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) having been lodged with them for your client to claim the deduction. As further evidence the superannuation fund did not receive your client's notice, the fund has advised they had not processed the contribution as a taxable contribution. Instead, it has been treated as a personal member contribution and that it has been counted towards her non-concessional cap for the 2009-10 income year. Consequently, the requirements of section 290-170 of ITAA 1997 have not been met.

Conclusion:

As not all of the conditions for deductibility under section 290-150 of the ITAA 1997 have been satisfied in relation to the 2009-10 income year, your client is not entitled to claim a deduction for the personal superannuation contributions made to her nominated superannuation fund in the 2009-10 income year.