SPAA wants superannuation pension stream clarified
The SMSF Professionals' Association of Australia (SPAA) has called on the Australian Taxation Office (ATO) to clarify when a superannuation income stream begins and ends.
Although a response was expected last month and numerous submissions made on the issue, the ATO has yet to come clean, according to SPAA.
SPAA is requesting clarification on what constitutes the provision of a pension in a fund and the tax implications it carries.
"It has the potential to impact significantly on members' benefits. Certainly there is the potential for significant additional income tax to be paid if the trustees get it wrong," SPAA director for educational and professional standards Graeme Colley said.
He said the link between tax law and SIS legislation had always been tenuous and a lag in finalising the draft ruling had exacerbated the issue.
Colley said if the ruling was backdated to 1 July 2007, it could be very costly for those who had misinterpreted the law.
"Larger public offer funds that are in this boat may end up with a larger tax bill to pay. They may need to amend their systems and reduce the balances of members to pay the additional tax.
"This may impact unfairly on members who are new to the fund or those who have been in pension phase for a shorter period than the backdating requires," he said.
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