ClearLaw Articles - Superannuation

Major super reforms announced ahead of 2013 Budget

Stuart Jones and Terry Hayes, Thomson Reuters — Tue, 30 Apr 2013 02:00:00 GMT

On 5 April 2013, the Government announced major superannuation reforms [presumably to end mounting speculation ahead of the 2013 Budget]. This article discusses those reforms.

Stronger Super - MySuper and insurance: regulations registered

Stuart Jones, Thomson Reuters — Wed, 27 Mar 2013 13:00:00 GMT

On 4 March 2013, the Superannuation Legislation Amendment Regulation 2013 (No 1) (Cth) was registered to implement aspects of the Stronger Super reforms. The amendments to the SIS Regulations and Corporations Regulations 2001 set out the notification requirements for MySuper transfers, prohibit self-insurance and restrict the types of insurances that can be offered within superannuation. The regulation also refines the minimum insurance requirements for default funds and MySuper members in regulation 9A of the Superannuation Guarantee (Administration) Regulations 1993 (Cth). Details of the amendments are outlined below.

Annual report reveals important statistics on the SMSF sector

Christina McElwain — Wed, 27 Mar 2013 13:00:00 GMT

In February 2013, the SMSF Professionals Association of Australia (SPAA) and Russell Investments issued an annual report titled "Intimate with Self-Managed Superannuation". The Report contains important statistics on the SMSF sector in areas such as trustee preferences and behaviour, investment trends and trustees' perceptions of the SMSF service industry.^[1]

The Report's findings highlight:

the need for SMSF trustees to support multi-asset investing; and
the need for financial planners to rethink the delivery of advice given the increasing demand for specialised advice and guidance about SMSF investment strategies.

New ATO alert on SMSF limited recourse borrowings

Steven Tang — Thu, 31 Jan 2013 01:00:00 GMT

On 20 November 2012, the ATO issued Taxpayer Alert TA2012/7 (the Alert). The Alert outlines the ATO's concerns with certain features of SMSF property investments, particularly those involving:

Limited Recourse Borrowing Arrangements (LRBAs); and
related unit trust arrangements.

The Alert highlights some key rules that an SMSF must follow to comply with superannuation law, including:

when using an LRBA, the asset must be held by a holding trustee, which we refer to as the custodian;
SMSFs may only use LRBAs to invest in allowable assets, for example SMSFs may not acquire residential property from related parties; and
SMSFs may only use LRBAs to invest in 'single acquirable assets'.

A new limited accountants' AFSL: will many bother; still too many unknowns?

Terry Hayes, Thomson Reuters — Thu, 31 Jan 2013 01:00:00 GMT

In late November 2012, the Government released draft regulations that would replace the accountants' exemption with a new form of limited licence - a limited Australian Financial Services Licence (AFSL). The intention is that the proposed new licence would mean that licensed practitioners would "advise on a wider range of alternatives, rather that limiting their advice to the establishment of a self-managed super fund [SMSF]". The draft regulations and draft explanatory statement are on the Future of Financial Advice website and comments on them closed on 21 December 2012.

Excess superannuation contributions tax: recent AAT cases

Wed, 28 Nov 2012 06:00:00 GMT

Two recent cases alert us to what the Administrative Appeals Tribunal (AAT) considers to be 'special circumstances' under section 292-465 of the Income Tax Assessment Act 1997 (ITAA97):

Re Hamad and FCT^[1]; and
Re Dickinson and FCT^[2].

Superannuation pensions upon death of member: Government to provide tax certainty

Stuart Jones, Thomson Reuters — Wed, 28 Nov 2012 06:00:00 GMT

Among the various tax and superannuation changes contained in the 2012-13 Mid-Year Economic and Fiscal Outlook (MYEFO), released on 22 October 2012, the Government has indicated that it will move to provide tax certainty for superannuation funds upon the death of a member in receipt of a superannuation income stream.

Trust distribution of capital gain held to be "special income" derived by SMSF – SCCASP Holdings as trustee for the H&R Super Fund v FCT

Stuart Jones, Thomson Reuters — Wed, 31 Oct 2012 01:00:00 GMT

The Federal Court has held that a resolution to distribute a $14m capital gain from a family trust was "special income" derived by a self-managed superannuation fund (SMSF) under former section 273(6) of the Income Tax Assessment Act 1936 (ITAA36) (taxable at 47%), notwithstanding that the amount was not actually received by the SMSF: SCCASP Holdings as trustee for the H&R Super Fund v FCT^[1].

ATO Compliance Program 2012-2013: ATO to target SMSF trustees and auditors

Alastair Keith — Sun, 30 Sep 2012 07:00:00 GMT

The ATO has published its Compliance Program 2012-2013 (Compliance Program), its so-called 'hit list' for the current financial year – which includes SMSF trustees and auditors. The ATO has identified 9 broad superannuation compliance risk issues. To enforce them, it will audit funds, trustees, auditors and employers.

While complying SMSFs have nothing to fear from the Compliance Program, all SMSF trustees and auditors should be aware of the ATO's intentions and seek advice if they have any concerns.

What does it take to be removed as a SMSF trustee? Views from the NSW Supreme Court

Jeff Holowaychuk — Sun, 30 Sep 2012 07:00:00 GMT

A recent case in the NSW Supreme Court reminds trustees of self-managed superannuation funds of their duties. In Basil Notaras v Brinos Notaras^[1], the Court found that Brinos' failure to participate in his fund's administration and management, together with his misuse of those powers he did exercise, justified his removal as trustee.