ING wants to be rid of legacy life issues
ING wants the Federal Government to provide capital gains tax (CGT) rollover loss relief for up to two years to facilitate a rationalisation of structures in the superannuation industry, including a move away from investment via life companies.
In a detailed submission to the Cooper Review, ING has argued that the use of life structures represents a legacy issue that has resulted in the addition of complexity and cost.
It said on this basis, the Government might be justified in extending the CGT rollover relief it provided with respect to fund mergers.
“We believe that broader rollover relief is necessary to allow trustees to restructure away from life company investing structures," the ING submission said. “The rollover relief should not rely on there being a successor fund transfer, or on the assets being in a net loss position to access the relief.”
Explaining its position, ING said that while it had originally made sense to leverage the existing life company infrastructure to manage superannuation investments, these advantages had been eroded over the years as superannuation funds had achieved scale in their own right.
“We are left with the legacy of investing via a life company, which involves significant complexity and duplication of effort affecting a significant book of business,” it said. “This legacy is largely no longer an efficient structure, but significant barriers exist to removing the life company.”
It said the restructure to move ownership of assets from the life company to the trustee of the superannuation fund would trigger CGT and consequently trustees often could not conclude that it would be in the best interest of members to change the investing structure.
AUTHOR
Mike Taylor
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
