Importance of Properly Claiming Personal Super Contributions
If you want to maximise your savings and secure a brighter financial future, consider making personal contributions to your superannuation fund.
These contributions can offer substantial tax benefits, but there’s a crucial aspect that you need to be aware of – the notice requirements.
Recently, a case before the Administrative Appeals Tribunal (AAT) highlighted the importance of following the notice requirements to the letter. In this case, a taxpayer sought to claim a deduction for personal super contributions, but their claim was denied because they failed to meet the notice requirements.
To claim a deduction for personal super contributions, you must do two things:
- Notify your super fund of your intention to claim a deduction.
- Receive an acknowledgment from the fund confirming that they received your notice.
Let’s break down the case that brought this issue to the forefront:
In the 2021 income year, the taxpayer made contributions totalling $6,550, with the final $550 added on June 30, 2021. They initially submitted a notice of intent to claim a $6,550 deduction before the last payment of $550 was made.
The fund rejected this notice because it did not match their records due to the last-minute contribution. A second notice for $6,000 was sent but was claimed to be unreceived. Despite the taxpayer subsequently claiming a $6,000 deduction on their tax return, the ATO denied the claim as the fund did not confirm receipt of a matching notice.
The lesson here: meticulous adherence to notice requirements is crucial to avoid deduction claim issues.
It’s imperative to meticulously follow the notice requirements for claiming deductions on your personal super contributions. Any discrepancies or mistakes in the process can lead to your claim being denied, potentially costing you valuable tax benefits.
To ensure a smooth deduction claim process, remember these essential steps:
- Notify your super fund of your intention to claim a deduction.
- Double-check that the notice matches your actual contributions.
- Ensure your fund acknowledges your notice.
You cannot lodge your income tax return until you have received the acknowledgment from the Super Fund.
While the case before the AAT serves as a cautionary tale, it also offers valuable insights into the importance of correctly claiming deductions on personal super contributions.
By following the notice requirements diligently and avoiding mistakes in the process, you can make the most of the tax benefits available and secure a more prosperous financial future.
If you have any questions or require assistance with your SMSF, please don’t hesitate to contact us on 1800 618 800 or via email at admin@simmonslivingstone.com.au. We are here to help you navigate the complexities of the tax system and ensure that you meet all your obligations in a timely manner.
