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Ruling

Subject: Deduction for personal superannuation contribution

Question

Can you claim a deduction for a personal superannuation contribution made in the 20xx-xx income year under section 290-150 of the Income Tax Assessment Act 1997?

Advice/Answer

No.

This ruling applies for the following period

Year ending 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

During the 20xx-xx income year you made a personal superannuation contribution of into your superannuation fund (the Fund).

You intended to claim the full amount in your 20xx-xx income tax return as a personal deductible superannuation contribution.

When preparing your 20xx-xx income tax return you identified that the contribution had been incorrectly reported by the Fund.

The error was not identified until after 30 June 2011 and your 20xx-xx income tax return has been prepared and lodged without a notice of intent to deduct being lodged with your superannuation fund.

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 290-160.

Income Tax Assessment Act 1997 Subsection 290-160(1).

Income Tax Assessment Act 1997 Subsection 290-160(2).

Income Tax Assessment Act 1997 Section 290-165.

Income Tax Assessment Act 1997 Subsection 290-165(2).

Income Tax Assessment Act 1997 Section 290-170.

Reasons for decision

Summary of decision

You have not lodged a notice of intention to claim a tax deduction within the specified timeframe as your 20xx-xx income tax return, the year in which the personal superannuation contribution was made, has been prepared and lodged without a notice of intent to deduct having already been given to your superannuation fund.

As one required condition has not been satisfied, you are not entitled to claim a deduction for personal superannuation contributions made in the 20xx-xx income year.

The Commissioner does not have the discretion to allow a deduction where a notice of intention to claim that deduction has not been provided before the required time.

Detailed reasoning

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 under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997). Section 290-150 of the ITAA 1997 sets out that all the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 must also be satisfied for the person to claim the deduction.

Notice of intent to deduct conditions:

Section 290-170 of the ITAA 1997 deals with the notice of intent to deduct contributions and states:

To deduct the contribution, or a part of the contribution:

o you must give to the trustee of the fund or the RSA provider a valid notice, in the approved form, of your intention to claim the deduction; and

o the notice must be given before:

o 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

o otherwise - the end of the next income year; and

o the trustee or provider must have given you an acknowledgment of receipt of the notice.

o The notice is not valid if at least one of these conditions is satisfied:

o the notice is not in respect of the contribution;

o the notice includes all or a part of an amount covered by a previous notice;

o when you gave the notice:

o you were not a member of the fund or the holder of the RSA; or

o the trustee or RSA provider no longer holds the contribution; or

o the trustee or RSA provider has begun to pay a superannuation income stream based in whole or part on the contribution;

o before you gave the notice:

o you had made a contributions-splitting application (within the meaning given by the regulations) in relation to the contribution; and

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

The trustee or provider must, without delay, give you an acknowledgment of a valid notice, subject to subsection (4).

The trustee or provider may refuse to give you an acknowledgment of receipt of a valid notice if the value of the superannuation interest to which the notice relates, at the end of the day on which the trustee or RSA provider received the notice, is less than the tax that would be payable in respect of your contribution (or part of the contribution) if the trustee or provider were to acknowledge receipt of the notice.

From the above it is clear that in order for section 290-170 of the ITAA 1997 to be satisfied, a notice of intent to deduct must be given before a specific time. The legislation itself is quite specific. It allows a deduction, subject to the necessary requirements being met. It does not contain a discretion that can be exercised by the Commissioner to allow a deduction for the relevant year of income where a notice of intention to claim a deduction has not been provided before:

o the end of the day you lodged your income tax return for the relevant year in which the contribution is made if your tax return has been lodged or

o if the relevant tax return has not been lodged, the end of the following income year for which the contributions have been made.

In this case, in the 20xx-xx income year you made a personal superannuation contribution into your superannuation fund (the Fund). You intended to claim the full amount in your 20xx-xx income tax return as a personal deductible superannuation contribution.

When preparing your 20xx-xx income tax return you identified that the contribution had been incorrectly reported by the Fund.

The error was not identified until after 30 June 2011 and your 20xx-xx income tax return has been prepared and lodged without a notice of intent to deduct being lodged with your superannuation fund.

Therefore, you have not lodged a notice of intention to claim a tax deduction within the specified timeframe required under section 290-170 of the ITAA 1997.

As all the conditions under section 290-150 of the ITAA 1997 have not been satisfied, you are not entitled to claim a deduction for personal superannuation contributions made in the 20xx-xx income year.

Commissioner's discretion to vary the notice

The Commissioner can only exercise discretion when he is given that power under a law he administers.

Unfortunately, section 290-170 of the ITAA 1997 does not give to the Commissioner the power to exercise a discretion to allow a deduction for the relevant year of income where a notice of intention to claim a deduction has not been provided before the required period.

Further, section 290-170 does not give the Commissioner the power to exercise discretion where any of the requirements of this provision have not been satisfied. This is regardless of the reasons those requirements were not met, or the extent to which those reasons were within or beyond a taxpayer's control.

Consequently, the Commissioner has no discretion to allow a deduction for the relevant year of income.