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Edited version of your written advice
Authorisation Number: 1051348303649
Date of advice: 15 March 2018
Ruling
Subject: Personal superannuation contributions
Question
Can the Client claim a deduction under section 290-150 of the Income Tax Assessment Act 1997 (ITAA 1997) for contributions made to the Fund?
Answer
No
This ruling applies for the following period:
Income year ended 30 June 2017
The scheme commences on:
1 July 2016
Relevant facts and circumstances
● On DD MMM YYYY, the Client made a personal superannuation contribution to the Fund.
● The Fund is a complying superannuation fund.
● At the time the contribution was made, the Client was XX years of age.
● When the Client made the relevant contribution, the Fund was mistakenly advised that it was a salary sacrifice contribution rather than a personal contribution.
● Subsequently, the Client commenced to receive a superannuation income stream from the Fund.
● After the Fund commenced to pay an income stream to the Client, the Client contacted the Fund to advise that the contribution was meant to be made as a personal contribution and not as a salary sacrifice contribution and requested the Fund to amend their reporting accordingly.
● The Client further advised the Fund that they intended to claim a deduction for the contribution and requested the Fund acknowledge their notice of intent to deduct the contribution.
● The Fund advised the Client that their notice of intent is not valid because the Fund has commenced to pay a superannuation income stream to the Client which is based on the contribution.
● The Client has previously ceased all employment.
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 Subsection 290-160
Income Tax Assessment Act 1997 Section 290-170
Income Tax Assessment Act 1997 Subsection 290-170(2)
Income Tax Assessment Act 1997 Subsection 290-170(3)
Reasons for decision
Personal superannuation contributions for the 2017 income year
● In accordance with section 290-150 of the ITAA 1997, a person can claim a deduction for personal contributions they made to a superannuation fund for the purpose of providing superannuation benefits for themselves, (or their dependants after their death).
● However, the conditions in sections 290-155, 290-160 (if applicable), 290-165 and 290-170 of the ITAA 1997 must also be satisfied for the person to claim the deduction.
● Specifically, section 290-170 of the ITAA 1997 states that in order to deduct the contribution, or a part of it, a person must give to the trustee of the fund a valid notice (in the approved form) of their intention to claim a deduction. The trustee of the fund must then, without delay, give the person an acknowledgment of a valid notice.
● Subsection 290-170(2) list the circumstances when a notice of intent to deduct a contribution is not valid, and relevantly states that a notice is not valid if the trustee has begun to pay a superannuation income stream based, in whole or in part, on the contribution.
● Based on the above, the Client cannot give to the trustee of the Fund a valid notice as required by subsection 290-170(2) of the ITAA 1997. This is because the trustee of the Fund has commenced to pay a superannuation income stream to the Client which is based on the relevant contribution. It follows then, that the trustee of the Fund cannot give to the Client an acknowledgement of a valid notice as required by subsection 290-170(3) of the ITAA 1997.
● Therefore, the Client cannot claim a deduction for the relevant contribution because they do not satisfy the conditions set out in section 290-170 of the ITAA 1997.