Issue
Is the taxpayer entitled to claim a deduction under subsection 8-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) if the amount paid on withdrawal from a superannuation fund is less than the amount they invested?
Decision
No. The taxpayer is not entitled to claim a deduction under subsection 8-1(1) of ITAA 1997 if the amount paid on withdrawal from a superannuation fund is less than the amount they invested.
Facts
The taxpayer purchased an allocated pension from a superannuation fund.
The taxpayer withdraws from the fund. The amount paid out is less than the amount the taxpayer invested.
Reasons for Decision
Subsection 8-1(2) of the ITAA 1997 denies the taxpayer a deduction for this loss because it is capital in nature.
This means that only the eligible termination payment provisions apply.