Government cuts related party transactions from SMSF bill
Self-managed superannuation fund (SMSF) associations are celebrating another win after the Federal Government quietly removed proposals to restrict related party transactions into and out of SMSFs.
The removal of the proposed Off Market Related Party Transfer amendments from the Taxation and Superannuation Laws Amendment (2013 Measures No.1 ) Bill 2013 came to light after it had progressed through the House of Representatives last week.
The amendments had been opposed by the Small Independent Superannuation Funds Association (SISFA) and the SMSF Professionals’ Association of Australia (SPAA) who had sided with the Federal Opposition in seeking the removal of the amendments.
SISFA chair Michael Lorimer said if the changes had been passed they would have had a wide impact on the use of listed shares and business real property within SMSFs.
“The Government was seeking ways to create on-market transactions and was considering changes to the Corporations Act following the Super System Review, but we are pleased they have not proceeded in this way. As such it is business as usual for SMSFs but it is sad that it has taken this much time and effort.”
SPAA chief executive Andrea Slattery said the amendments would have imposed inequitable conditions on SMSFs, as they singled SMSF trustees out within the superannuation sector by imposing costly compliance requirements.
“We have always advocated a level playing field for all superannuation funds, and the retraction of the proposed amendments will help achieve this goal. SPAA is pleased to see that SMSF trustees will not be faced with increased costs,” Slattery said.
The amendments also carried an anti-SMSF flavour, according to Lorimer, with the Government rejecting claims that appropriate measures were already in place.
“Across the lobbying period the universal message from the SMSF sector was that these amendments were not needed and enough restrictive measures were in place.
“However we continued to get pushback from the Government that SMSFs were not being used appropriately and some trustees were up to no good,” Lorimer said.
In the Explanatory Memorandum to the Bill, the restrictions were stated to be necessary after the Super System Review, led by Jeremy Cooper, found “that the off-market acquisition and disposal of assets between related parties and SMSFs ... lacks transparency, is inherently risky and is open to greater abuse than non-related party transactions”.
However in commenting on the removal of the amendments, Assistant Treasurer David Bradbury stated that “the concerns the measure is seeking to address are not as pressing as they were at the time of the review”.
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