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Edited version of your written advice
Authorisation Number: 1012890384180
Date of advice: 7 October 2015
Ruling
Subject: Concessional contributions
Question
Can the client claim a deduction in the 2014-15 income year, for a personal superannuation contribution made during the 2015-16 income year?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015;
Year ended 30 June 2016.
The scheme commences on:
1 July 2014.
Relevant facts and circumstances
The client was born during the 19XX-XX income year.
The client worked for a certain company between dates in the relevant income year, completing sufficient hours of work to pass the work test for the relevant income year.
The client wished to make a concessional contribution to her self-managed superannuation fund during the relevant income year.
Between certain dates at the end of the relevant income year, the client was out of the country and was not able to make the transfer.
The client is now in retirement phase and will not pass the work test for the subsequent income year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 295-150.
Superannuation Industry (Supervision) Regulations 1994 regulation 7.04.
Reasons for decision
Summary
A personal superannuation contribution is only deductible for the income year in which the contribution was made.
Detailed reasoning
Deductibility of personal superannuation contributions
The legislation in relation to the deductibility of personal superannuation contributions is outlined in section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997). Relevantly, subsection 290-150(3) of the ITAA 1997 states that:
(3) You can deduct the contribution only for the income year in which you made the contribution.
In the present case, a deductible superannuation contribution was intended to be made by the client to their self-managed superannuation fund (the Fund) for the relevant income year. However, due to circumstances outside the client's control, no contribution had been made by 30 June 20XX.
The legislation itself is quite specific. It requires that a contribution be made in the relevant year of income to a superannuation fund and, subject to the necessary requirements being met, a deduction will be allowed for that year of income.
No provision exists which would allow a contribution to be 'back-dated' to the previous income year. Furthermore, there is no discretion under Division 290 of the ITAA 1997 or anywhere else in the tax legislation that would allow the Commissioner to alter the conditions for deducting personal superannuation contributions
Therefore it is considered that, if the client was to make a personal superannuation contribution during the subsequent income year, the contribution would only be deductible for the subsequent income year.
Work test
A regulated superannuation fund may only accept contributions in accordance with the rules outlined in regulation 7.04 of the Superannuation Industry (Supervision) Regulations 1994 (SISR). According to subregulation 7.04(1) of the SISR, a superannuation fund may only accept a contribution from a member aged between 65 and 74 if that member satisfies the 'work test.'
The work test requires the member to be gainfully employed. To satisfy the work test, the member must work for at least 40 hours during a consecutive 30-day period each financial year in which the contributions are made. Unpaid work does not meet the definition of 'gainfully employed'.
As your client is currently aged between 65 and 74 years of age, they will need to satisfy the work test if they wish to make a contribution in the subsequent income year.