Government succumbs on super rollovers
THEFederalGovernment has succumbed to concerted industry pressure and agreed to amend the tax laws to remove an anomaly that threatened to ‘double-count’ people’s superannuation assets for reasonable benefit limit (RBL) purposes.
The Minister for Revenue and Assistant Treasurer Senator Helen Coonan announced last week the Government would amend the tax legislation to correct the anomaly, formed after a controversial Australian Taxation Office (ATO) decision.
In December last year, the ATO ruled that individuals who had taken a pension from their super fund but then subsequently decided to roll the pension back into an accumulation product in the same super fund, did not trigger a reportable event for RBL purposes.
This effectively meant that when those same individuals eventually took another pension from their super fund, they would have the value of the first pension added to the second for RBL purposes, potentially exposing them to a much higher tax rate when they inevitably breached the RBL.
The technical services manager at AM Corporation, Kim Guest, last week said the industry lobbied hard for the changes, which solved many of the dilemmas facing financial advisers with clients who were looking to roll pensions back into accumulation products in their super funds.
“The situation put a lot of advisers, especially those that advise on self-managed super, in a difficult position,” she says.
Senator Coonan said last week the amendments to the legislation, when introduced, would be backdated to July 1, 2001.
AUTHOR
George Liondis
Recommended for you
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
With a growing number of advisers now running their own business, they need to pivot their career identity to being a business owner rather than just as a financial adviser if they want to futureproof their business.
Zenith Investment Partners has launched a range of new managed account portfolios over the past quarter, including on Insignia Financial’s Expand platform.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
