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Superannuation

New Super Laws

New Super Laws

 

Understanding superannuation and its implications is essential for most business owners, and with frequent reform to the superannuation landscape, it can be a challenge to ensure that they are meeting their super obligations.

While super funds are one of the most tax effective structures, they are also highly regulated and closely supervised. Super fund trustees often require specialised and specific advice, while super benefits, as a major component of many family groups’ wealth, require tailored and specific structuring to ensure that they are paid to the desired beneficiaries in the most tax effective way.

At Sladen Legal, we understand that superannuation is one of the most important structures in a family group and that it should not be looked at in isolation. We pride ourselves on taking a holistic approach to super, to ensure that super funds not only receive up to date advice, but that super is appropriately dealt with from a succession and estate planning perspective. Additionally, we offer a full range of super dispute services, for dealing with regulatory breaches and action by the revenue authorities.

Sladen Legal has some of Australia’s leading superannuation lawyers, specialising in advice and structuring for self managed superannuation funds (SMSFs). Our lawyers are members of leading professional, revenue authority and government committees and consultation forums and are actively involved in shaping the future of super regulation and reform. 

Our team provides expert advice in all areas of superannuation, including:

  • Regulatory and tax issues affecting super funds
  • SMSF compliance requirements
  • SMSF investments in private trusts and companies
  • Alternative SMSF investment structures
  • Tax effective superannuation strategies
  • SMSF regulatory and tax disputes
  • SMSF succession planning
  • SMSF borrowing (limited recourse borrowing arrangements)
  • Transferring property into SMSFs
  • Transactions involving SMSFs
  • Rollover and restructure of funds
  • Payment and pension structures
  • Establishment of new super funds
  • Updating existing super trust deeds
  • Incorporating special purpose trust deeds

For a list of our SMSF pricing, please download our Self Managed Superannuation Fund Price List

Put through an order from our Superannuation Store

Contact

+61 3 9611 0129

super@sladen.com.au

Superannuation News

New Super Laws

The new super laws, announced in the May 2016 Federal budget, are the most significant changes to the superannuation system since 2007. Most of the new laws commenced on 1 July 2017. 

To help you navigate the new super laws, Sladen Legal has prepared a number of articles on their application. These include:

ATO to extend transitional period for new SMSF TBAR reporting regime

As reported in our previous Sladen Snippet, the Australian Taxation Office (ATO) is currently developing a new self managed superannuation fund (SMSF) event based reporting regime to be called the Transfer Balance Account Report or TBAR.

Are actuarial certificates required if a pension is commuted on 30 June 2017

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?

Further changes to TRISs – qualifying for retirement phase and the cost base reset

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.

Many SMSFs to face “monthly” TBAR reporting regime from 1 July 2017

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:

Death benefit pensions may be commuted into accumulation prior to 1 July 2017

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.

ATO gives guidance on how to commute pensions by 30 June 2017 for the transfer balance cap measure

The Australian Taxation Office (ATO) has released Practical Compliance Guideline PCG 2017/5 which gives guidance as to how trustees of self managed superannuation funds (SMSFs) can commute pensions by 30 June 2017 in order to comply with the new transfer balance cap measure.

Documents for the new super laws

As a result of the commencement of the new super laws on 1 July 2017, Sladen Legal has prepared a number of document packages.

Sladen Legal video presentations on the new super laws

On 28 February 2017, Sladen Legal’s Phil Broderick, Melissa Colaluca and Rob Jeremiah gave presentations on the new super laws. To see a video of their presentations, please click below:

Units trusts and cost base resets under the transfer balance cap (TBC)

The cost base reset measure has been implemented to help alleviate the retrospective application of the transfer balance cap measure (so that only future gains are taxed). However, as discussed in the article, the cost base reset does not always work for super funds that hold units in unit trusts as the cost base reset occurs at the unit level not the underlying asset level.

Do super fund deeds and pension documents need to be updated pre 1 July 2017?

With the new super laws commencing from 1 July 2017, advisors and trustees of self managed superannuation funds (SMSFs) are starting to consider whether they need to update their SMSF trust deed or their pension documents.

The death of transition to retirement income streams?

There seems to be some confusion about the fate of transition to retirement income streams (TRIS). TRISs will not be abolished from 1 July 2017. Rather, they will no longer qualify for “pension phase” (or retirement phase under the new terminology). 

Planning for 1 July 2017

The new super laws are the biggest changes to super since 2007. Given that most of the measures commence on 1 July 2017, there are a number of planning matters to consider prior (and after) that date. 

How the new laws affect market linked pensions

Under the transfer balance cap measure market linked pensions (MLPs) are lumped with other defined benefit pensions. Defined pensions are treated differently to account based pensions given the inability to commute such pensions.

The transfer balance cap

The transfer balance cap is the new limit on how much a member can have in their pension account and accordingly is a limit on how much a super fund can have in “pension phase”. Income and capital gains are tax free to the extent they are in pension phase. To the extent that a super fund is in “accumulation phase” its income is taxed at 15% and capital gains, on assets held for more than 12 months, are taxed at 10%. 

Transfer balance cap – transitional CGT relief – cost base reset

The transfer balance cap measure includes a transitional CCT relief via a cost base reset. This relief is designed to ensure that only capital growth post the introduction of all of transfer balance cap (ie from 1 July 2017) is taxed. However, like all of the new measures the relief is complicated and requires careful consideration prior to 1 July 2017.

Transfer balance cap – how the cap affects death benefits

One of the most significant consequences of the transfer balance cap is the effect it has on the payment of death benefits. This will affect all couples who have a combined superannuation balance of $1.6 million. 

Non-concessional contributions cap

The headline items to this measure is that the non-concessional contributions cap will be reduced from $180K to $100K, the “bring forward rule” will be reduced from $540K to $300K and that members with account balances over $1.6 million will not be able to make non-concessional contributions. But like most of the new measures there are additional complexities to the new non-concessional cap measures.

 

Superannuation Lawyers

Featured
Phil Broderick
Phil Broderick

Principal

Rob Jeremiah
Rob Jeremiah

Principal

Denise Tan
Denise Tan

Senior Associate

Melissa Colaluca
Melissa Colaluca

Senior Associate

Ashleigh Eynaud
Ashleigh Eynaud

Lawyer

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