Edited version of your private ruling

Authorisation Number: 1012569323686

Ruling

Subject: Personal contributions

Questions

1. Is a notice of intent to deduct for the purposes of section 290-170 of the Income Tax Assessment Act 1997 valid where, at the time the notice is given, you are no longer a member of the superannuation fund to which the contributions were made?

2. Are you entitled to claim a deduction in respect of personal superannuation contributions for the 2012-13 income year?

Answers

1. No

2. No

This ruling applies for the following period

Year ended 30 June 2013

The scheme commenced on

1 July 2012

Relevant facts and circumstances

1. You are over 55 years of age.

2. In the 2012-13 income year, you were a member of Fund A and Fund B.

3. In previous income years, you have been making personal contributions into Fund A. The trustee of Fund A acknowledged your notice of intention to claim a tax deduction in the past.

4. You made a personal contributions to Fund A in the 2012-13 income year.

5. In the 2012-13 income year, your entire superannuation benefits at Fund A were rolled over into Fund B after you had made the contribution to Fund A.

6. You have provided a copy of the roll-over benefits statement prepared by Fund A setting out the elements of the payment rolled into Fund B.

7. You had not provided a written notice to the trustee of Fund A advising your intention to claim a tax deduction in respect of the personal contribution made in the 2012-13 income year.

8. You have provided a written notice to the trustee of Fund B.

9. A letter from the trustee of Fund B to you states:

we are unable to process your request to claim a tax deduction for personal contributions received via rollover. To be able to process a request to claim a tax deduction, these personal contributions would need to have been made directly to the trustee of Fund B.

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 Section 290-155.

Income Tax Assessment Act 1997 Section 290-160.

Income Tax Assessment Act 1997 Section 290-165.

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(2)(c).

Reasons for decision

Summary

10. A deduction for personal superannuation contributions is not allowable to you in respect of the amount contributed to a superannuation Fund.

11. One condition for deductibility is that a person lodges a valid notice of intent to claim a deduction and that notice is acknowledged by the trustee of the superannuation fund.

12. Because the notice of intent to deduct condition has not been satisfied, you are not entitled to claim a deduction for personal superannuation contributions made in the 2012-13 income year.

13. In addition, once a payment is rolled-out from a superannuation Fund, the initial contribution loses its character as a contribution.

Detailed reasoning

Deductions for superannuation contributions

14. Subsection 290-150(1) of the Income Tax Assessment Act 1997 (ITAA 1997) allows a person to claim a deduction in respect of personal contributions made to a superannuation fund or retirement savings account (RSA) during an income year for the purpose of providing superannuation benefits for themselves, or their dependants after their death.

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

Notice of intent to deduct conditions

16. One of these conditions, in section 290-170 of the ITAA 1997, is that the person making a contribution must provide a notice of intent to claim a deduction (the notice) to their superannuation fund.

17. In respect of the 2012-13 income year, that notice of intent must be given to the fund by the earlier of:

· 30 June 2014, or

· the day on which their 2012-13 income tax return is lodged.

18. Section 290-170 of the ITAA 1997 provides that a person wishing to claim a deduction must lodge the notice of intent with the fund to which they made the contribution. Consequently, you can only give the notice to the trustee of Fund A.

19. At the time a notice is given or to be given to a fund, you must still be a member of that fund and the fund must be holding the contribution.

20. In the 2012-13 income year, your entire benefits were transferred from Fund A to Fund B. This transfer was a roll-over of those benefits from Fund A to Fund B. You have provided a copy of the roll-over statement setting out the elements of the payment rolled into Fund B.

21. It should be noted that once a payment is rolled-out from Fund A, the initial contribution of loses its character as a contribution. As a result, the initial contribution forms part of the tax-free component reported in the roll-over statement to Fund B.

22. Although you rolled-over the benefits to Fund B, Fund B is not the fund who received the contribution and included the contributed amount as assessable income for the relevant year. Therefore, Fund B is unable to accept the notice from you.

23. Since you are no longer a member of Fund A, the trustee of Fund A cannot accept any notice from you. Once benefits have been paid out it is also too late for Fund A to alter the components of that roll-over payment.

24. Accordingly, you have not and can no longer satisfy the notice requirement in paragraph 290-170(1)(c) of the ITAA 1997.

Discretion

25. Section 290-170 of the ITAA 1997 does not give to the Commissioner the power to exercise a discretion to allow a deduction where any of the requirements of this provision have not been satisfied, regardless of the reasons those requirements were not met, or the extent to which those reasons were beyond the taxpayer's control.

26. The Commissioner also has no discretion in the income tax legislation to allow a fund receiving a roll-over of superannuation monies to accept a notice in relation to contributions not made to that fund.