Over the next month the ATO plan to send letters, emails, SMSs and carrier pigeons to individual members who they believe may be affected by the super reforms. This will include those with balances over $1m, any TRIS recipients, defined benefit pensioners and anyone who made a concessional contribution last year. That's a lot of people. The communications will...
A number of articles have appeared in the financial press concerning the ATO's view that a transition to retirement income stream does not convert to a standard pension once the necessary triggers of release have occurred. This is contrary to long standing practice. An obvious consequence is that all pensions that commenced as TRISs, but have now become...
Kelly O’Dwyer has described the inclusion of limited recourse borrowing within the total super balance and the transfer balance cap as a minor and technical change to the super reform measures. This is a ridiculous statement. There is nothing minor in this measure. As the total super balance is applied to a member’s eligibility to make non-concessional...
The reform Regulations have now been finalised. They are largely unchanged form what was initially proposed. A couple of subsequent discussion topics have been abandoned. Notably the notion that actuarial certificates will no longer be required and that complying pensions could be commuted where they contributed to a transfer balance cap issue. Neither of these will proceed...
From 1 July 2017, the Government will remove the anti-detriment provision which allows superannuation funds to claim a tax deduction for a portion of the death benefits paid to eligible dependants. A payment may still be made until 30 June 2019 provided the member died no later than 30 June 2017 This benefit was often the only...
On 15 January 2018, Craig commences a $3 million superannuation income stream in his SMSF, Cormac Super Fund. Craig’s transfer balance account is $3 million and he has a $1.4 million excess transfer balance on this date. On 20 January, the Commissioner issues a determination to Craig stating his crystallised reduction amount as $1,401,765 ($1.4 million excess...
We do not yet have a process for notifying the ATO of the commencement of a pension but they are clearly assuming that this will occur within days of commencement as this type of example is common in their explanatory notes. Andrew has a personal transfer balance cap of $1.6 million. He starts a second pension worth...
Consider Julian and Justine, both aged 70. They each have reversionary pensions and are the only fund members. Julian has a $4m balance and Justine, $2m. Fund assets comprise a $5m property plus assorted shares, fixed interest and cash. On 30th June 2017 they will reset the cost bases of selected assets. These will include the property...