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Edited version of your written advice
Authorisation Number: 1013019475732
Date of advice: 23 May 2016
Ruling
Subject: Deduction for personal superannuation contributions
Question
For the purposes of section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997), can a person (the Taxpayer) deduct in the 20XX-YY income year a superannuation contribution they made to a superannuation fund in the 20XX-YY income year but was received by the fund in the 20YY-ZZ income year?
Answer
No.
This ruling applies for the following period:
Income year ended 30 June 20YY
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Taxpayer is younger than 50 years of age.
In June 20YY, the Taxpayer made a contribution to a complying superannuation fund (the Fund) by an electronic transfer of funds with the intent to claim a tax deduction for the Contribution in the 20XX-YY income year.
The Contribution was received by the Fund in July 20YY.
It is stated that all the criteria for eligibility to claim a deduction in the 20XX-YY income year were satisfied, including:
• a valid notice to deduct was given to the trustees of the Fund;
• the Fund trustees acknowledged the receipt of the notice;
• maximum earnings as an employee test was met; and
• deduction is limited to the amount specified in notice.
The superannuation deduction would not create or increase a loss.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 290-150.
Income Tax Assessment Act 1997 Section 290-155.
Income Tax Assessment Act 1997 Section 290-160.
Income Tax Assessment Act 1997 Section 290-170.
Reasons for decision
Summary of decision
Where a superannuation contribution is made by an electronic transfer of funds, the contribution is taken to have been made when the funds are credited to the superannuation fund's account.
Therefore, the Taxpayer cannot claim a deduction in the 20XX-YY income year for the contribution made to the Fund, because the contribution was, in fact, made in the 20YY-ZZ income year when it was received by the Fund and not in the 20XX-YY income year.
Deduction for personal deductible superannuation contributions
Conditions for deducting personal contributions are set out in section 290-150 of the ITAA 1997.
In accordance with subsection 290-150(1) of the ITAA 1997, a person can claim a deduction for personal contributions they make to a superannuation fund for the purpose of providing superannuation benefits for themselves (or their dependants after their death).
Subsection 290-150(2) of the ITAA 1997 provides that the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 must also be satisfied before a person can claim a deduction for the contributions made in that income year.
Further, subsection 290-150(3) of the ITAA 1997 states that a person can deduct the contribution only for the income year in which they made the contribution.
Taxation Ruling TR 2010/1 Income tax: superannuation contributions (TR 2010/1) summarises the ways in which funds are typically transferred and when the contribution is made and, relevantly in the table in paragraph 13, states:
No. |
If the funds are transferred by ... |
A contribution is made when ... |
1 |
Making a cash payment (either in Australian or foreign currency) to the superannuation provider |
The cash is received by the superannuation provider. |
2 |
An electronic transfer of funds to the superannuation provider |
The funds are credited to the superannuation provider's account. |
On the facts, in this case the conditions in sections 290-155, 290-160, 290-165 and 290-170 of the ITAA 1997 have been met. However, the contribution was made by electronic transfer of funds to the Fund in June 20YY and was received by the Fund in July 20YY. As such, the Contribution is taken to have been made by the Taxpayer in the 20YY-ZZ income year when it was received by the Fund and not in the 20XX-YY income year.
Therefore, the Taxpayer cannot deduct the contribution in the 20XX-YY income year because a contribution can only be deducted in the income year it is made, and in this case that was in the 20YY-ZZ income year.