Edited version of your written advice

Authorisation Number: 1012685052033

Ruling

Subject: Personal superannuation contribution

Question

Are you entitled to claim a deduction under section 290-155 of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of a personal superannuation contribution initiated during the 2013-14 income year but not received by the superannuation fund until the 2014-15 income year?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commences on

1 July 2013

Relevant facts and circumstances

You and your spouse are the members of the Fund, a self-managed superannuation fund.

Your spouse intended to make two contributions of X each for the two of you to the Fund in the 2013-14 income year.

In the 2013-14 income year you faxed through Teletransfer forms to the bank requesting two bank transfers of X each to the Fund's account.

The Fund's account statements show an amount of X credited during the 2013-14 income year, from your husband. However, the second transfer of X was not credited into the Fund's account until the 2014-15 income year.

According to the information you provided, the second transfer of X seems to have been delayed due to bank processing errors from a missing BSB number in the bank instructions.

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 subsection 290-150(3)

Reasons for decision

Summary

A transfer of X to the Fund initiated during the 2013-14 income year is not considered to be a contribution made in the 2013-14 financial year. This is because the monies transferred were not received and available to be used by the Fund on or before 30 June 2014. You are therefore not entitled to claim a deduction in respect the amount of X credited to the Fund's account in the 2014-15 income year.

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).

A person can only claim a deduction for personal contributions made to a superannuation fund where all conditions under section 290-150 of the ITAA 1997 have been satisfied.

Section 290-150 of the ITAA 1997 states in part:

(3) You can deduct the contribution only for the income year in which you made the contribution.

Subsection 290-150(3) of the ITAA 1997 clearly states that a taxpayer may only deduct contributions in the income year in which they are made.

Taxation Ruling TR 2010/1 entitled 'Income tax: superannuation contributions' sets out the Commissioner's view on contributions made to a superannuation fund, an approved deposit fund or a retirement savings account.

In relation to when a superannuation contribution is made TR 2010/1 goes on to state at paragraphs 182 and 183:

182. A superannuation contribution is made when the capital of the fund is increased. As explained in paragraphs 183 to 210 of this Ruling, the contribution may be made when an amount is received, or ownership of an asset is obtained or the fund otherwise obtains the benefit of an amount.

Contributions of funds

183. A contribution of funds as cash or an electronic funds transfer, is made when the amount is received by the superannuation provider or credited to the relevant account.

As such, it is not until an amount is credited to a bank account of the superannuation fund that a contribution will be taken to be made. That is, a fund member is only taken to have made a contribution to their superannuation fund when the superannuation fund receives it.

Applying the law to your circumstances

You have advised that your spouse intended to make a personal superannuation contribution of X for the two of you in the 2013-14 income year. In the 2013-14 income year you faxed two Teletransfer request forms to the bank for two transfers of X to your Fund.

However, due to bank processing errors involving BSB numbers, one of the transfers was not credited to the Fund's account in the 2013-14 income year. The contribution is considered to have been received by the Fund at that time it was credited to the Fund's bank account, which was in the 2014-15 income year.

Accordingly, the second contribution was not made to the Fund in the 2013-14 income year but made in the 2014-15 income year.

The income tax provisions in the ITAA 1997 that applies to the deductibility of a personal superannuation contribution allows a deduction subject to satisfying the necessary legislative provisions in section 290-150 of the ITAA 1997. A contribution is only deductible for the income year in which the contribution was made.

The ITAA 1997 does not contain a discretion that can be exercised by the Commissioner to allow a deduction for a year of income where the contributions are actually made in a later year of income

From the information provided, the second contribution is considered to have been made to the Fund in the 2014-15 income year since the funds were credited to the Fund's account on in that income year.