ATO’s position on reserve allocations ‘unreasonable’
The Australian Taxation Office (ATO) interpretation of the law with respect to so-called reserve allocations does not appear to be reasonable and may require further examination, according to SMSF Alliance principal, David Busoli.
In an analysis of the ATO’s position, Busoli said the ATO had taken the position that reserve allocations to existing account based pensions were a strategy to intentionally reduce a member's total superannuation balance and/or the balance of the member's transfer balance account.
However, he said he did not believe such approach was reasonable in circumstances where such allocations might be necessary to deal with legacy reserves such as existing anti detriment reserves.
“A more acceptable position would be to allow such allocations but require that they be credited to the member’s transfer balance account,” he said.
Busoli said he expected the issue would be subject to further consideration.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
