Edited version of your private ruling

Authorisation Number: 1012516450192

Ruling

Subject: Deduction for personal superannuation contributions.

Question

Are you entitled to claim a deduction for personal superannuation contributions where the trustee of the relevant superannuation fund has not acknowledged your notice of intention to claim a deduction for the contributions for each of the relevant income years?

Answer

No.

This ruling applies for the following periods:

2007-08 income year

2008-09 income year

2009-10 income year

2010-11 income year

The scheme commences on:

1 July 2007

Relevant facts and circumstances

You made personal superannuation contributions to your superannuation fund (the Fund) in respect of your policy for the 2007-08, 2008-09, 2009-10 and 2010-11 income years.

You thought that by returning your 'notice of intent to claim the deduction' forms (notice forms) to your Fund in each of the income years that you made the relevant contributions (2007-08, 2008-09, 2009-10 and 2010-11), you had sought the Fund trustee's acknowledgment of the notice forms.

However, your accountant advised you to seek written confirmation of the acknowledgment of the notice forms from the Fund before your income tax returns for the relevant income years could be lodged.

Therefore you made a number of telephone enquiries to the Fund early in 2013 requesting written confirmation that the contributions that you made in respect of your policy had been treated as tax deductible contributions for each of the relevant income years

You received a contributions summary from the Fund in response to your enquiry. The letter from the Fund (first Fund letter) included the details relevant to the contributions made and how the contributions had been treated by the Fund.

You disputed the details as provided by the Fund as you considered the details on the contributions summary differed from the amounts shown on your copies of the notice forms.

After this dispute, you again wrote to the Fund to query why their records did not reflect the amounts shown on your copies of the notice forms for the relevant income years and you advised them you had copies of all the relevant income years except for the 2010-11 income year.

You stated a representative from the Fund advised you that for the 2010-11 income year the Fund never sent you a 'notice of intent to claim a deduction' form for the 2010-11 income year', therefore you believe that may explain why you did not have in your records a copy of this notice form.

You made further requests by telephone to the Fund as you maintained the information from the first Fund letter was incorrect.

You subsequently received a written reply from the Fund (second Fund letter) stating that a recent audit of their records had determined the contributions summary detailed in the first Fund letter as Personal (taxed) contributions were taxed as Employer contributions.

As a result, an adjusted amount for the tax deducted had been refunded to you and the information had been reported to the Australian Taxation Office (ATO).

The Fund also referred to your enquiry regarding claiming a tax deduction for the 2008 to 2011 financial years and advised that as the Fund did not receive a Notice of intention to claim a tax deduction for these years within the allowable timeframe, therefore the Fund was unable to acknowledge the notice forms.

You again contacted the Fund as you maintained the information on the second Fund letter was different to what you had been informed previously during your telephone queries to the Fund.

Following from this, you were contacted by a Fund representative to advise that the Fund was unable to backdate your contributions as tax deductions without ATO approval and suggested your accountant could write to the ATO on your behalf on this matter.

After discussing this further with your accountant regarding the anticipated expense of seeking the ATO approval, you contacted the Fund and asked to speak to a senior Fund representative as you were unhappy with what the Fund had informed you as the process required to resolve your situation.

You stated that the Fund representative claimed they did not have a record of receiving any of the notice forms for the relevant income years that you told them you had sent to them each year.

You received a further response (third Fund letter) following from the discussion in which it was stated to you that your matter had been referred to the Fund trustee to seek clarification regarding the requirements in lodging the notices of intent to claim a deduction (notice forms) for the relevant income years and your request to backdate the notice forms.

The Fund explained that in order to be eligible to claim a deduction you must have provided the Fund with your Notice of Intention to Claim a Tax Deduction before the end of the following financial year in which the contributions were made and the Fund must have sent you a written acknowledgement of your letter and agreed in writing to the amount you will claim as a deduction.

In addition, the Fund advised that any notice forms received after the above deadline will not be valid and will not be accepted by the ATO as these requirements are clearly outlined in the relevant income tax law.

It was again confirmed to you that the Fund had no record of receiving these notice forms within the required timeframe nor had the Fund provided you with a letter of acknowledgement, therefore the Fund was unable to process your intention to claim these deductions.

You lodged your individual income tax returns for each of the income years 2007-08, 2008-09, 2009-10 and 2010-11 in June 2013 and claimed a deduction in each income year as a personal superannuation contribution in respect of your policy.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 290-150.

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

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

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 Section 290-165.

Income Tax Assessment Act 1997 Section 290-170.

Reasons for decision

Summary

You are not entitled to claim a deduction for personal superannuation contributions in your income tax returns for the 2007-08, 2008-09, 2009-10 and 2010-11 income years.

Detailed reasoning

Subsection 290-150(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides you can claim a deduction for a contribution you make to a superannuation fund for the purpose of providing superannuation benefits for yourself.

Subsection 290-150(2) provides that the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 must all be satisfied before the person can claim a deduction for the contributions made in that income year.

Notice of intent to deduct conditions

Subsection 290-170(1) of the ITAA 1997 provides that for a person to be eligible for a deduction for a personal superannuation contribution, the person must give a valid notice of their intention to claim the deduction to the trustee of their superannuation fund (the fund trustee), 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 addition, the person must also have been given an acknowledgement of the notice by the trustee of the superannuation fund.

The conditions for deductibility are explained in detail in Taxation Ruling TR 2010/1 (TR 2010/1) titled 'Income Tax: superannuation contributions'. The relevant paragraph from TR 2010/1 is as follows:

Notice of intention to claim a deduction

263. A person who intends to deduct their personal superannuation contributions must give to their superannuation provider a valid notice in the approved form before lodging their income tax return for the year (or within 12 months of the end of the income year if they have not lodged their return by that time). The trustee must also acknowledge receipt of the notice.

Applying the law to your circumstances

The legislation that applies to the deductibility of a personal superannuation contributions itself is quite specific. It allows a deduction subject to satisfying the necessary legislative requirements - notably, in your case the notice requirements of section 290-170 of the ITAA have not been met.

From the information provided by the Fund in their letter to you (third Fund letter), the matter was referred to the Fund trustee seeking clarification regarding your request to backdate your Notice of Intention to Claim a Tax Deduction for the financial years 2008 through to 2011.

The Fund also advised that they confirm the Fund had no record of receiving these notices within the required timeframe and had no record of having provided you with their acknowledgement in respect of the notices.

Therefore as the trustee of the relevant superannuation fund has stated they have not received or acknowledged your notice of intention to claim a deduction for the contributions for each of the relevant income years, you have not satisfied the notice requirement condition in subsection 290-170(1) of the ITAA 1997 which must be met in order to claim the deduction.

As noted earlier, in order to be able to claim a deduction under section 290-150 of the ITAA 1997 all the conditions in subsection 290-150(2) including subsection 290-170(1) must be satisfied. Failure to satisfy just one of the necessary conditions will prevent a deduction from being able to be claimed.

Consequently, as the notice requirement condition in subsection 290-170(1) has not been met, it does not become necessary to determine whether any of the other conditions listed in subsection 290-150(2) of the ITAA 1997 have been satisfied.

Conclusion:

As you have not satisfied all the conditions in section 290-150 of the ITAA 1997 required, you are not eligible to claim a deduction for any personal superannuation contributions made in respect of your policy for the 2007-08, 2008-09, 2009-10, 2010-11 income years.