Legal news
The Australian Taxation Office (ATO) has made it clear: when a self managed superannuation fund (SMSF) receives services or assets on non-commercial terms - or fails to incur necessary expenses - the result can be harsh. Non-arm’s length expenditure (NALE) can trigger nonarm’s length income (NALI), exposing the fund to significant tax consequences.
In the 2023-24 Budget, the Government announced that the super guarantee framework will be reformed to align the payment of super guarantee contributions with an employee’s regular pay cycle, instead of the current quarterly requirements.
The exposure draft legislation for the new ‘Payday Super’ rules has now been released, with consultation open until 11 April 2025.
The super guarantee charge, payable where employers fail to make contributions in full and on time, will be updated, including a new ‘administrative uplift’ component of up to 60% of the shortfall amount.
Division 296 tax, the proposed new $3 million super fund tax on unrealised gains, did not pass in the Senate yesterday, 13 February 2025.
Division 296, if passed, would impose an additional 15% tax on members with a $3 million or more total super balance (not indexed).
Division 296 is now unlikely to be put to the Senate before an election, and is expected to become a key election issue.
#division296 #$3million #unrealisedgains
