Q&A – Deductible contributions and death

Find out what your peers are asking – based on real-life questions submitted to TechConnect.

By William Truong, Technical Services Manager

Is it too late for my deceased client to claim a deduction on personal super contributions?

Q: My client, Rohan made personal super contributions to his super fund but unfortunately passed away before submitting a notice of intent to claim a tax deduction. Can the Legal personal representative (LPR), the executor of the estate, still claim the deduction on the deceased’s behalf?

A: Yes, the LPR can claim the tax deduction on behalf of Rohan. Once the LPR notifies the ATO of Rohan’s death, they may lodge a final tax return on his behalf called the ‘Date of death tax return’. This covers the period from the start of the financial year (previous 1 July) to the date of his death. For example, if Rohan died on 6 March 2020, his date of death tax return covers the period 1 July 2019 – 6 March 2020.

ATO Tax Ruling 2010/1, paragraph 68 states that an LPR may give a superannuation provider a notice of intention to deduct on behalf of a deceased person who made a personal contribution to super prior to death. Also, the LPR must meet the remaining notice requirements. If the LPR of the deceased intends to lodge a section 290-170 notice of intention to claim a deduction they must do so before lodgement of the deceased's final tax return (or within 12 months of the end of the income year in which the deceased died if that is earlier).

A notice will not be valid under the following circumstances (even if submitted within the appropriate timeframes):

  • the deceased is not a member of the fund
    • (for example, where the deceased member’s benefits have been fully used to pay death benefit lump sums to beneficiaries prior to the LPR submitting a Notice of intention to claim form).
  • the trustee no longer holds the contribution
    • (for example, the trustee has paid a partial super death benefit prior to the LPR submitting the notice of intent form. Where this happens a valid deduction notice will be limited to a proportion of the tax-free component of the superannuation interest that remains after the roll over or withdrawal (see Examples 10 and 10A of the TR 2010/1).
  • the trustee has begun to pay a death benefit income stream based in whole or part on the contribution prior to the LPR submitting the notice of intent form.

The notice will be invalid for the entire contribution, regardless of the amount of the death benefit income stream.

Note: the above examples assume that the death benefits are paid from the accumulation interest to which the deceased had contributed in the financial year. If the deceased had separate superannuation interests, death benefits could be paid from those interests without affecting the validity of a notice of intent.

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.