Edited version of private advice

Authorisation Number: 1012647986761

Ruling

Subject: Notice of Intent to claim personal contributions

Question

Can your client lodge a notice of intent to deduct under section 290-170 of the Income Tax Assessment Act 1997 (ITAA 1997) with the original recipient superannuation fund after the contribution has been rolled over to a new superannuation fund?

Advice/Answer

No.

This advice applies for the following period

Year ended 30 June 2013

The scheme commenced on

1 July 2012

Relevant facts and circumstances

Your client has claimed a tax deduction for personal superannuation contributions made in previous years.

Late in the fourth quarter of the 2012-13 income year, your client opened a new account with a provider (the Provider).

Your client made contributions to this account with the intention of claiming the whole amount as a tax deduction for the 2012-13 income year.

During the third quarter of the 2013-14 income year, the contributions were transferred to a superannuation fund (the Fund).

In the fourth quarter of the 2013-14 income year, your client sent a notice of intent to claim a deduction for personal superannuation contributions to both the Provider and the Fund for the 2012-13 income year, however both entities have been unable to action their notice.

Your client was unaware that your client had to lodge the intention to claim a tax deduction with the Provider before transferring your client's contributions to the Fund.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 290-150.

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 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 Subsection 290-170(2).

Income Tax Assessment Act 1997 Subsection 290-170(5).

Income Tax Assessment Act 1997 Subsection 290-170(6).

Summary

The notice of intent to deduct personal superannuation contributions for the 2012-13 income year with the original recipient, is invalid as the contributions were rolled over to the Fund prior to lodging the notice.

Therefore your client is ineligible to claim a tax deduction for the personal contributions made to the Provider in the 2012-13 income year.

Detailed Reasoning

Personal 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).

However, subsection 290-150(2) of the ITAA 1997 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.

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

Notice of intent to deduct conditions

Subsection 290-170(1) of the ITAA 1997 requires you to provide a valid notice of your intention to claim the deduction to the trustee of the superannuation fund (the trustee) or the provider of an RSA (the provider). The notice must be given by the earlier of the date you lodge your income tax return or the end of the income year following the year in which the contribution was made. You must also have been given an acknowledgement of the notice by the trustee or the provider.

Validity of notices

Subsection 290-170(2) of the ITAA 1997 sets out the conditions which specify when a notice will not be valid. Among these conditions it is specified that a notice will not be valid if, at the time when the notice is given, the trustee no longer holds the contributions.

Under subsection 290-170(2) of the ITAA 1997, it states:

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

(a) the notice is not in respect of the contribution;

(b) the notice includes all or part of an amount covered by a previous notice;

(c) when you gave the notice:

(i) you were not a member of the fund or the holder of the *RSA; or

(ii) the trustee or *RSA provider no longer holds the contribution; or

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

(d) before you gave the notice:

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

(ii) the trustee or RSA provider had not rejected the application. [bold emphasis added]

In this case, your client made personal contributions to a new account with a provider (the Provider), late in the fourth quarter of the 2012-13 income year. Your client subsequently transferred the whole amount during the third quarter of the 2013-14 income year, to the Fund.

In the fourth quarter of the 2013-14 income year, your client lodged a notice of intent to the Provider of your client's intention to claim a deduction.

It is considered that the notice your client provided to the Provider is not valid, as, at the time when the notice was given, the trustee no longer held the contributions. Therefore, this condition has not been met.

The successor fund provision under subsection 290-170(5) of the ITAA 1997 would not apply as the receiving fund would not meet the definition of 'successor fund' under subsection 9951(1):

successor fund, in relation to a transfer of a *superannuation interest of a member of a *superannuation fund, or a holder of an *RSA, (the original fund) means a superannuation fund or RSA that satisfies the following conditions:

(a) the fund or RSA confers on the member or holder equivalent rights to the rights that the member or holder had under the original fund in respect of the interest;

(b) before the transfer, the *superannuation provider of the fund or RSA has agreed with the superannuation provider of the original fund that the fund or RSA will confer on the member or holder equivalent rights to the rights that the member or holder had under the original fund in respect of the interest.

Nor would subsection 290-170(6) of the ITAA 1997 apply as it deals with amounts transferred to a MySuper product in another complying superannuation fund.

Consequently, your client does not satisfy the notice of intent to claim a deduction conditions prescribed under section 290-170 of the ITAA 1997.

As previously discussed, to be eligible to claim a deduction for personal superannuation contributions, all of the conditions must be satisfied. As your client has not satisfied the condition under section 290-170 of the ITAA 1997, your client is not eligible to claim a deduction for personal superannuation contributions made to the Provider in the 2012-13 income year.