The ATO has released SMSF News Alert 2018/3 under which it acknowledges a defect in the transfer balance cap regime which can cause the debit on the commutation of a market linked pension (or life expectancy pension) to equal nil.
The Government has released a bill to extend the application of the non-arm’s length income (NALI) rules to income and capital gains gained or produced under arrangements involving non-arm’s length expenditure. The genesis of this measure was non-commercial limited recourse borrowing arrangement (LRBA) loans but the proposed legislation applies to all arrangements where there is non-arm’s length expenditure or costs and also to arrangements where assets are acquired for under market value consideration.
In a recent speech, James O’Halloran, Duty Commissioner Superannuation at the ATO, set out the ATO’s current areas of focus for the self managed superannuation fund (SMSF) sector. This includes that the ATO:
The Australian Securities & Investments Commission (ASIC) has released a media release putting the financial advice sector on notice about ensuring that binding death benefit nominations (BDBNs) are signed and witnessed correctly.
The ATO has announced the extension of the lodgment date for self managed superannuation (SMSF) annual returns for the 2016/17 year to 30 June 2018. Because 30 June 2018 falls on a Saturday, the ATO has confirmed the lodgment can occur on Monday 2 July 2018 without penalties.
Self managed superannuation funds (SMSFs) are not required to obtain an actuarial certificate if 100% of the SMSF is in “pension phase” for 100% of the year. That is, the SMSF uses the segregated method for the whole year. But what happens for SMSFs that use the segregated method for the 2017 year but, because of the transfer balance cap measure, have to commute back their pensions to $1.6 million by 30 June 2017?
The Treasury Laws Amendment (2017 Measures No. 2) Bill 2017 has been tabled in Parliament. The Bill proposes to make two important changes to transition to retirement income streams (TRISs). Firstly, to allow certain TRISs to qualify for “retirement phase” and, secondly, to ensure TRISs qualify for the cost base reset.
As part of administering the new transfer balance cap measure, the Australian Taxation Office (ATO) is currently developing a new self managed superannuation fund (SMSF) event based reporting regime. This regime is likely to be in the form of a report to be called the Transfer Balance Account Report or TBAR. At this stage, the reporting regime is expected to be as follows:
There is some good news and some bad news with the ATO’s release of Practical Compliance Guide PCG 2017/6. The good news is that spouses in receipt of death benefit pensions may commute their death benefit pensions in excess of the transfer balance cap back into accumulation before 1 July 2017. The bad news is that this concession does not apply to non-spouses and won’t apply after 30 June 2017.