Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 290.90

  (1)   Section   290 - 60 applies as modified by this section if you make a contribution in respect of another person at a time, and at that time:

  (a)   the other person is an employee of a company in which you have a controlling interest; or

  (b)   you are connected to the other person in the circumstances set out in subsection   (5); or

  (c)   you are a company connected to the other person in the circumstances described in subsection   (6).

  (2)   Treat the other person as your employee at that time for the purposes of subsection   290 - 60(1).

Note 1:   A deduction may be denied by section   85 - 25 if the employee is your associate.

Note 2:   Section   86 - 60 (read together with section   86 - 75) limits the extent to which superannuation contributions by personal service entities are deductions.

  (3)   Despite subsection   290 - 60(2), for you to deduct the contribution the condition in subsection   (4) needs to be satisfied instead of the condition in section   290 - 70.

  (4)   The other person must be:

  (aa)   an employee (within the expanded meaning of employee given by section   12 of the Superannuation Guarantee (Administration) Act 1992 ) of the other person's employer; or

  (a)   engaged in producing the assessable income of the other person's employer; or

  (b)   an Australian resident engaged in the business of the other person's employer.

  (5)   For the purposes of paragraph   (1)(b), the circumstances are:

  (a)   you are the beneficial owner of shares in a company of which the other person is an employee, but you do not have a controlling interest in the company; and

  (b)   you are at * arm's length with the other person in relation to the contribution; and

  (c)   neither the other person, nor a * relative of the other person:

  (i)   has set apart an amount as a fund, or has made a contribution to a fund, for the purpose of providing * superannuation benefits for you or a relative of yours; or

  (ii)   has made an * arrangement under which the other person or relative will or may do so.

Company controlling interest deductions

  (6)   For the purposes of paragraph   (1)(c), the circumstances are:

  (a)   the other person is an employee of an entity that has a controlling interest in the company; or

  (b)   an entity that has a controlling interest in the company also has a controlling interest in a company of which the other person is an employee.