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MelissaD83(Enthusiast)Enthusiast
30 July 2021

Hello,

I have a new client who has informed me she accessed $10k from her super during COVID but realised she didn't need it and was advised she could claim it as a deduction on her tax return if she returned it.

I do not believe this is correct as I feel it would be double dipping as it is not a normal contribution, I know the ATO was looking at this kind of behaviour heavily and I want to make sure I am giving my client the correct advice.

In simple terms, can the client claim it as a deduction on her 2021 tax return?

Thank you

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6 replies
808 views
6 replies

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Chantelle ATO(Community Support)Community Support
2 Aug 2021

Hi @MelissaD83

That's a good question.

If someone makes a super withdraw and recontributes it to gain a tax advantage, we may determine that Part IVA applies. This means the tax benefit may be cancelled and administrative penalties and interest charges can apply.

More information about Part IVA – the general anti-avoidance rule for income tax can be found on our website.

Let me know if you have further questions.

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Most helpful reply

Chantelle ATO(Community Support)Community Support
2 Aug 2021

Hi @MelissaD83

That's a good question.

If someone makes a super withdraw and recontributes it to gain a tax advantage, we may determine that Part IVA applies. This means the tax benefit may be cancelled and administrative penalties and interest charges can apply.

More information about Part IVA – the general anti-avoidance rule for income tax can be found on our website.

Let me know if you have further questions.

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MelissaD83(Enthusiast)Enthusiast
2 Aug 2021

Thank you Chantelle, I figured as much as I had read quite a lot during the year in relation to this matter but I just wanted to be 100% in responding to the client as she is adament her previous accountant said she could claim it to which I have now advised her to return to that accountant if that is the case as I am not prepared to do it.

Thank you for your response, I appreciate it.

Mel

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