Income Tax Assessment Act 1936

SCHEDULE 2D - TAX EXEMPT ENTITIES THAT BECOME TAXABLE  

Division 57 - Tax exempt entities that become taxable  

Subdivision 57-F - Superannuation deductions  

SECTION 57-40   CONTRIBUTIONS UNDER DEFINED BENEFIT SUPERANNUATION SCHEMES  

57-40(1)    

This section applies to a deduction allowable apart from this Subdivision to the transition taxpayer under section 290-60 of the Income Tax Assessment Act 1997 for a contribution made to a fund in relation to a person if:

(a) the person was an employee of the transition taxpayer at any time before or after the transition time; and

(b) the contribution was made under a defined benefit superannuation scheme (within the meaning of section 6A of the Superannuation Guarantee (Administration) Act 1992 ).

57-40(2)   Deduction allowable only if sum of all deductions exceeds defined benefit threshold amount.  

The deduction is not allowable for a year of income if the sum of all deductions of the transition taxpayer to which this section applies for the year of income is less than or equal to the defined benefit threshold amount (see subsection (4)) for the year of income.

57-40(3)   Amount of deduction not allowable.  

If the sum is greater than that amount, so much of the deduction as is worked out using the following formula is not allowable:

Amount of deduction                             Sum of all deductions of the transition taxpayer to which this section applies   for the year of income

×

Defined benefit threshold amount for the year of income

57-40(4)   Meaning of defined benefit threshold amount .  

The defined benefit threshold amount for a year of income is:

(a) if the year of income is the transition year - the unfunded liability amount (see subsection (5)); or

(b) in any other case - that amount as reduced by the total amount of deductions to which this section applies, that, because of subsection (2) or (3), have not (disregarding section 57-55 ) been allowable to the transition taxpayer for all previous years of income.

57-40(5)   Meaning of unfunded liability amount .  

The unfunded liability amount is the value, worked out as at the transition time in accordance with actuarial principles, of the liabilities of the transition taxpayer to provide superannuation benefits for, or for dependants of, employees of the transition taxpayer, where the liabilities:

(a) had accrued as at the transition time; and

(b) were, according to actuarial principles, unfunded at that time; and

(c) were liabilities only under defined benefit superannuation schemes.