The ATO will not accept a superannuation contribution is deductible by a fund member based on the date it left a bank account, but on when it was received by a fund, with an industry body noting this was a timely warning before the end of the financial year.
Institute of Financial Professional Australia head of technical services Natasha Panagis said the regulator, in a private binding ruling released earlier this year, had rejected a claim for a personal deductible contribution by a fund member who missed the contribution deadline by a single day.
“In this ruling, the ATO confirmed a tax deduction can only be claimed in the year the super fund receives the contribution, not when the funds left the bank account,” Panagis said in a recent online briefing to IFPA members.
“In this case, an individual transferred money to their super fund on 28 June 2023, but it was not received by the fund until after 1 July.
“The Income Tax Assessment Act says you can only deduct the contribution for the year in which you made the contribution, and the ATO’s tax ruling on contributions [Taxation Ruling 2010/1] also confirms if money is transferred electronically to a super fund, then the contribution is made when it is credited to the fund.
“This ruling emphasises the need for advisers to ensure personal super contributions are not left to the last minute, particularly as we approach 30 June, and that it is important to allow sufficient time for that contribution to be received by the super fund.”
She added advisers should also remind clients they need to adhere to the notice of intent timeframes to ensure they do not miss out on a deduction.
“The notice of intent should be submitted to the fund before the earlier of lodging their tax return or 30 June of the following year,” she said.
“You could do it earlier than that if the client is planning on making a withdrawal, splitting across contributions to their spouse, doing a rollover or potentially commencing a pension. In any of those circumstances, you should submit a notice of intent before any of those things happen as well.”
