In early March 2009, the Tax Office published an article (http://www.ato.gov.au/content/downloads/tpl00186147taxagent43.pdf ) which highlights the basic rules that must be met in order to be eligible to claim a deduction for personal superannuation contributions made in the 2008 financial year. Due to the importance of this information, we have reproduced the article in full:
Recent audit activity has identified a high rate of incorrect claims for deductions for personal super contributions in 2008 tax returns.
Many of the incorrect claims are attributable to a failure to consider the new legislative requirements now governing this deduction.
Subdivision 290-C of the Income Tax Assessment Act 1997 replaced the old provisions in section 82AAT of the Income Tax Assessment Act 1936 with effect from 1 July 2007. The requirements for deductibility are similar but have important differences too. The basic rules are now that clients must have
- made personal contributions from ?after-tax' money to a complying super fund or retirement savings account (RSA) - salary sacrifice contributions don't qualify;
- satisfied the 10% test - generally less than 10% of their assessable income, plus reportable fringe benefits, can be from employment related activities - don't use taxable income to work this out;
- provided their super fund or RSA provider with a notice of intent to claim an income tax deduction in the approved form, for example using the Notice of intent to claim or vary a deduction for personal super contributions (NAT 71121), advising them of the amount they intend to claim as a deduction;
- given the notice on or before the date their tax return is lodged, or by 30 June of the following income year, whichever is earlier; and
- received a formal acknowledgment of the notice from the fund or RSA provider before claiming the deduction - this shows the amount that can be claimed.
If the client is selected for audit and is found not to have met these requirements, their claim will be disallowed.