A technical expert has reminded superannuation fund members claiming deductions for personal contributions that variations to a notice of intent can only be made under certain circumstances where the claimed amount has decreased.
BT technical consultant Michael Tran said a notice of intent to claim in relation to a personal deductible contribution could only be varied downwards without the change requiring approval from the ATO.
“For example, if a fund member originally wishes to claim $20,000, but they now wish to claim $15,000, a variation notice will succeed,” Tran said during a recent BT Academy briefing.
“A variation notice cannot be used to increase the amount that they want to claim.
“Instead, if a fund member has a desire to increase the amount they wish to claim, the member will lodge two notices of intent.”
He said the rules for a variation to a notice of intent were generally the same as an unamended notice of intent and both required the use of an approved form, that the member was still a member of their fund and the latter still held the contribution, and no income stream had been started with any part of the contribution.
The two notices, however, differed in the timing of their lodging, with an unamended notice of intent to be submitted by the earlier of two dates, which is either when the taxpayer lodges their tax return for that income year or at the end of the following financial year.
“If we’re looking at the current 2022/23 financial year and the taxpayer decides to lodge their tax return on 31 October 2023, this will be the date because that’s the earlier date. If the taxpayer does not lodge a tax return, then the date will be 30 June 2024, the end of the following financial year,” he said.
These dates were not applicable where a downward variation occurred because the member had claimed more than their taxable income, which would fail as a deduction, he said.
“If the taxable income is only $5000, for example, but a taxpayer wishes to claim $7000, they’ll fail for the excess of $2000. The ATO declines the deduction on this amount and they notify the taxpayer,” he said.
“Only in this circumstance can the taxpayer lodge a variation notice after the general timeframes to vary the deduction down by the amount that they have been declined.
“This will be obviously after the date that they launched their tax return and it could even be after the end of the following financial year.”
