Tax season often brings a sense of urgency and stress, as individuals and businesses scramble to ensure they’re maximizing their deductions. Personally contributing to super is a common method used by individuals to minimise their personal tax liability, with super contributions needing to be made prior to the end of the financial year on 30 June.

But contributing the funds is not the only requirement to ensure you can claim the tax deduction.

The Australian Taxation Office (ATO) will only allow a tax deduction for personal super contributions if:

1. You’ve given a valid notice to the trustee of the super fund stating your intention to claim a tax deduction for all or part of the contributions you’ve made to that fund in a financial year.
2. An acknowledgement of the notice has been provided back to you from the trustee.

 

What is a Notice of Intent to Claim a Tax Deduction?

A Notice of Intent to Claim a Tax Deduction is the formal declaration to the superannuation fund indicating your intention to claim a tax deduction for specific contributions made in that financial year.

It lets the fund know of your intention to claim the tax deduction and advises them of the amount of contributions that they need to pay tax on.

Concessional contributions (the contributions we claim as a deduction) are taxed in the super fund at 15% so the NOI ensures the correct tax is paid by the super fund.

The NOI can be lodged using a form providing by your super fund, or using the super fund online forms (depending on the fund) OR using the ATO Notice of Intent to Claim a Tax Deduction template.

 

Acknowledgment of Notice of Intent to Claim a Tax Deduction.

The super fund must review the Notice and confirm that you are in fact eligible to claim a personal tax deduction for the amount you have included on your Notice.

They must respond the member by providing an Acknowledgment that states:

1. The fund has received the Notice of Intent from the member
2. The date – you received the original notice AND of the acknowledgement.
3. The members account and fund details
4. The total amount of contributions the notice covers and that will be claimed as a deduction.
5. The date the contributions were made OR the income year they were made in.

 

Once the fund has acknowledged the amount of contribution the member is able to claim, they will also advise the ATO of the amounts that are to be treated as concessional contributions.

Unless the fund has provided the Acknowledgement letter – you ARE NOT entitled to claim the tax deduction.

 

If you have completed the Notice of Intent incorrectly, by including an amount that you are not eligible to claim for example, the fund will respond and ask you to correct your request and advise the amount you are eligible to claim.

 

What if I want to change the amount I claim?

A valid notice of intent cannot be revoked or withdrawn but you may vary the amount that is being claimed – as long as it is done before the due date.

 

When do I need to complete my Notice of Intent to Claim a Tax Deduction?

The ATO requires that you must give your notice of intent (or any variation) by either:

• The day you lodge your income tax return for the income year in which the contribution was made.
• The end of the income year following the income year in which the contribution was made (30 June the following year).

 

What other requirements apply?

To be able to successfully claim the deduction you will need to ensure at the time the NOI is lodged with the super fund that you also meet the following requirements:

• You are still a member of the fund.
• You have not withdrawn the funds or rolled the funds over to a new super fund.
• You have not commenced a pension / income stream with the contributions you made.
• You have not lodged an application to split the contribution to your spouse.

 

If I have an SMSF Do I still need to complete a Notice of Intent.

Even though in an SMSF you are both the member and Trustee – you are still required to complete a Notice of Intent to Claim a Tax Deduction AND respond with an Acknowledgment Letter.

You must write to yourself to advise you are claiming a tax deduction and you must respond to yourself to confirm that you are eligible to claim the deduction.

 

What can go wrong?

Where a NOI fails to be lodged with the super fund and Acknowledgement received – you are not entitled to claim a tax deduction for contributions made.

Once the time deadline has passed or you have rolled funds out or commenced a pension, you also lose the opportunity to claim.

Even if you have completed your return, claimed the tax deduction and received a refund of tax – if you have not completed the correct process – it is likely that the ATO will identify this issue down the track, and your return will be amended – requiring you to pay back tax that you should have paid if the tax deduction has not been claimed.

 

In summary:

While it might seem like a small administrative task or mere formality, its importance cannot be overstated as it plays a critical role in optimizing your tax outcomes.

By understanding its importance and ensuring it is properly prepared and submitted within the required time frame, you can ensure you maximise the tax outcomes by making a super contribution.

You should:

1. Discuss with your accountant and/ or financial planner the amount of contributions made and the amount that you intend to claim for that year.
2. Complete your Notice as soon as possible after making the contribution and knowing how much you wish to claim- ensuring it is lodged with the super fund before the deadline.
3. Speak to you accountant and / or financial planner before closing your fund, rolling over to another fund or asking your fund to commence a pension- to ensure you dont miss out on an opportunity to claim.

 

How Can Alto Help?

Alto can help you to understand the requirements of a Notice of Intent ensuring you receive the best tax outcomes and work with you to complete the administration correctly.

 

Author: Donna Bruce