Government pushed on personal contributions review

“It has been recognised that the current paper-based section 290-170 notice regime may no longer be appropriate in the era of online data and electronic tax returns. One proposal that is being considered is that the ATO take a greater role as facilitator of section 290-170 notices,” she said.

“Although no discussion paper has been released, it has been suggested that the taxpayer or their accountant could submit the section 290-170 notice to the ATO when doing their tax return, and the ATO would notify the super fund to tax the contribution. Although welcome, any changes would require amending tax legislation.”

Speaking to SMSF Adviser, Ms Roberts said while the ATO currently has a lot of their plate, the government and tax office will need to move on this soon with the First Home Super Saver scheme passing both houses of Parliament last week.

“That means that for the person making personal contributions or salary sacrificing contributions [for the scheme], the ATO is going to need to know if they're tax deductible and issue them with a tax deduction notice by the time that legislation actually starts which is 1 July 2018,” she said.

“So I think there's going to actually be a bit more of a move on this once the ATO starts getting more involved and working out how they'll get that up and running.”

Members making personal contributions under the First Home Super Saver Scheme will want to ensure that they receive the tax deduction for their contributions, she said.

If they don’t lodge their notice form within the required time frame, however, they won't actually get the tax concession for it, she warned.

“The ATO is going to have to become more involved in the tax deduction notice process to basically facilitate the first home super saver scheme, because otherwise individuals may just miss out and not send their notice to the super fund [in time].”

SuperConcepts non-executive director Stuart Forsyth said some of the issues around the process of claiming tax deductions for personal contributions were raised by the industry during the consultation that Treasury undertook for the 2016 budget superannuation measures.

“What we were interested in, when we were talking to Treasury about it, was trying to make it so that the system was less bureaucratic and more intuitive,” said Mr Forsyth.

It needs to be clearer from day one whether a contribution is meant to be deductible or not, he explained.

“At the moment it goes in as a personal contribution and then if you don’t get the notice within the required period, it becomes a non-concessional contribution,” he said.

“So sometimes it’s a non-concessional contribution because they don’t receive the notice that specifies it’s a concessional contribution, and sometimes it flip flops from concessional back to a non-concessional contribution, because the person doesn’t have any assessable income.”