Minor superannuation tax reform technical amendments and amendments to running balance accounts, closes on Wednesday 27 March 2019

The Government is committed to the smooth, ongoing implementation of the 2016-17 Budget Superannuation Tax Reform Package that improved the flexibility, sustainability and integrity of superannuation tax concessions.

On 30 and 31 October 2018 the Assistant Treasurer announced that the Government would be making minor technical amendments to superannuation tax legislation and regulations to correct unintended outcomes that relate to the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016.

The draft legislation contains provisions to:

  • Correct an error in the way that market-linked pensions are valued under the transfer balance cap when they are commuted or rolled over, resulting in a nil debit.
  • Ensure that death benefits that include life insurance proceeds are not subject to tax when they are rolled over to a new superannuation fund.

The draft legislation also includes amendments that will permit the Commissioner of Taxation to account for additional tax debts in running balance accounts.

The draft regulations:

  • Fix the valuation of defined benefit pensions under the transfer balance cap to reflect when pensions are permanently reduced following an initial higher payment, such as for some public sector defined benefit reversionary pensions.
  • Change the definition of life-expectancy period for innovative income stream products to account properly for the number of days in a leap year.
  • Maintain the capped defined benefit treatment of market-linked pensions under the transfer balance cap where they have been rolled over as a result of a successor fund transfer.

Interested parties are invited to make a submission.

(Source: Australian Treasury)

On the blog:

Budget Forum 2018: Superannuation and Pension Changes in the Budget 2018-19, by Emily Millane

 

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