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If you are an employer who pays super contributions for employees and directors at the end of the financial year, be aware that timing may preclude you from claiming deductions until the following financial year.

The Income Tax Assessment Act grants deductions to employers for superannuation contributions when the contribution is "made" (note: not "paid"). When a contribution is paid at the end of the financial year, its appropriate year for deductibility depends on when it is regarded as having been "made".

Lag time even in the age of the instantaneous

Contributions to super funds are legally recognised or "made" when the capital in the super fund is actually increased. You must be aware that payments between financial institutions are not processed immediately, but are subject to net settlement which occurs overnight. Therefore, if you make the contribution payments by Bpay or bank transfer, make sure you leave enough time for it to be processed into the super fund. If it is not received by the fund until July, even though you processed the payment in June, it is not deductible in the financial year in which it was paid because the contribution is not "made" in that year.

Claiming your personal contributions

If you are an individual taxpayer and an owner of a business or an investor, you may be able to claim an income tax deduction for your personal superannuation contributions. If so, you need to complete a special form called a "Notice of Intent to claim or vary a deduction for personal super deductions". This form has the ATO reference of NAT 71121 and can be downloaded from the ATO website.

You must complete the form and provide it to your superannuation fund before the earliest of:
bulletThe date you lodge your income tax return or
bullet30 June after the financial year in which the contributions were made.

You also need to obtain an acknowledgement from your superannuation fund of receipt of the Notice of Intent.

If you are changing superannuation funds then it is extremely important that the Notice of Intent be finalised before this happens. The Notice of Intent requires, amongst other things, for you to declare that you are a still a member of the superannuation fund and that it still holds the contributions for which you are seeking to claim an income tax deduction. If you have already transferred all of your contributions to another superannuation fund then this declaration cannot be made and the Notice of Intent will be unable to be completed.

Please contact Saward Dawson if you feel that you may be able to claim your superannuation contributions as an income tax deduction because there are a few other conditions that may need to be satisfied.

Bruce Saward

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