Income Tax Assessment Act 1997
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Hide history noteChoice to reduce contributions included in assessable income
295-265(1)
The *superannuation provider in relation to a *complying superannuation fund can choose to reduce the amount of contributions that would otherwise be included in the fund ' s assessable income for an income year under item 1 of the table in section 295-160 if it has pre-1 July 88 funding credits available for the income year.
When funding credits are available
295-265(2)
Use this method to work out whether a fund has pre-1 July 88 funding credits available for an income year: Method statement
Step 1.
Identify the amount of pre-1 July 88 funding credits unused at the end of the previous income year.
Step 3.
Add any pre-1 July 88 funding credits transferred to the fund in the income year under regulations made for the purposes of subsection 342(7) of the Superannuation Industry (Supervision) Act 1993 .
Step 4.
Deduct from the step 3 amount:
Step 5.
The result is the pre-1 July 88 funding credits available to the fund for the income year.
That amount, reduced by any amount specified in a choice made under subsection (1) for the income year, is the amount of pre-1 July 88 funding credits unused at the end of the income year.
Note 1:
Regulations under subsection 342(7) of the SIS Act allow APRA to approve transfers of pre-1 July 88 funding credits between funds.
Note 2:
Subsection 342(6) of that Act covers the situation where the fund's rules are changed to produce a reduction in pre-1 July 88 funding credits and the trustee notifies APRA of the change.
295-265(3)
If a notice is given to the *superannuation provider in relation to the fund under subsection 342(2) of the Superannuation Industry (Supervision) Act 1993 granting the trustee a pre-1 July 88 funding credit, this section applies as if the pre-1 July 88 funding credit had arisen at the beginning of the income year in which 1 July 1988 occurred.
295-265(4)
However, if a notice is given to the *superannuation provider in relation to the fund under subsection 342(4) of the Superannuation Industry (Supervision) Act 1993 for the income year, the fund has no pre-1 July 88 funding credits.
Note:
Subsection 342(4) of that Act covers the situation where the fund ' s rules are changed to produce a reduction in pre-1 July 88 funding credits and the provider fails to notify APRA of the change.
Limit on choice
295-265(5)
The total amount covered by the choice cannot exceed the pre-1 July 88 funding credits available to the fund for the income year.
295-265(6)
The total amount covered by the choice also cannot exceed the amount of contributions that would otherwise be included in the fund ' s assessable income for the income year under item 1 of the table in section 295-160 that are used to fund liabilities that accrued before 1 July 1988.
295-265(7)
The regulations may prescribe either or both of the following:
(a) the manner in which the *superannuation provider in relation to a *superannuation fund is to work out the amount applicable to the fund under subsection (6) for an income year;
(b) methods (other than the method specified in subsection (6)) of working out how the provider of a superannuation fund can apply pre-1 July 88 funding credits.
295-265(8)
Methods prescribed under paragraph (7)(b) may be applicable to particular *superannuation funds or to a class or classes of superannuation funds.
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