Extend CGT relief, says ASFA
The Association of Superannuation Funds of Australia (ASFA) wants the Federal Government to extend capital gains tax (CGT) relief for superannuation funds that choose to merge.
ASFA chief executive Pauline Vamos backed the call by pointing to the latest Australian Prudential Regulation Authority data that showed deferred tax in funds with more than $50 million in assets now amounted to about $4.7 billion.
“These are substantial amounts which underline the reason for an extension in CGT relief on fund mergers,” she claimed.
Vamos said that if the CGT relief were not extended, superannuation fund members whose account balances had declined during the global financial crisis could face further losses.
“Fund members will take a direct hit on their accounts if fund mergers proceed without this relief for funds carrying capital losses,” she said.
Vamos said ASFA knew of one fund where the trustee was moving as quickly as possible to finish a merger before CGT relief ended on 30 June, because it had estimated that failure to merge before that date would impact its members by a reduction of up to 2.1 per cent in the unit price for 2011 annual returns.
AUTHOR
Mike Taylor
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