Superannuation Alert - 17.4.14

Financial Services eBulletin - 17 April 2014

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

  • On 3 April 2014, the ATO updated its website notes regarding what a trustee of a self-managed super fund needs to consider when commencing or stopping a superannuation income stream, or pension, as was explained in Taxation Ruling 2013/5.

  • On 9 April 2014, the ATO released Taxation Determination TD 2014/7 which sets out in what circumstances a bank account of a complying superannuation fund is a segregated current pension asset under section 295-385 of the Income Tax Assessment Act 1997. The Commissioner accepted that where a bank account includes "sub accounts" that record, maintain and report all transactions and balances on a sub-account basis, a sub-account held for the relevant sole purpose may be a segregated current pension asset under s 295-385.

  • On 10 April 2014, the ATO registered Self Managed Superannuation Funds (Limited Recourse Borrowing Arrangements - In-house Asset Exclusion) Determination 2014. The Determination ensures that an investment in a related trust held by an SMSF as a required part of a limited recourse borrowing arrangement (LRBA) is excluded from being an in-house asset of the SMSF in specific circumstances outlined in the Determination, such as at the beginning of an LRBA where a borrowing referred to in s 71(8)(b) of the Superannuation Industry (Supervision) Act 1993 (SIS Act) has not yet begun or the related trust does not yet hold the acquirable asset under s 67A of the SIS Act. The determination is taken to have commenced on 24 September 2007.

  • On 10 April 2014, APRA registered the Superannuation Industry (Supervision) modification declaration No 1 of 2014 which modifies reg 4.07E of the Superannuation Industry (Supervision) Regulations to permit self-insuring defined benefit funds and sub-funds to continue their self-insurance arrangements beyond 1 July 2016 when the transition period ends. This will apply where a registrable superannuation entity (RSE) has been permitted to self-insure defined benefit members, and the defined benefit members are transferred, on a successor fund basis, to a second or subsequent RSE.

  • On 10 April 2014, the Administrative Appeals Tribunal held in Dominic B Fishing Pty Ltd and Commissioner of Taxation [2014] AATA 205 that crew members on a commercial fishing vessel operated by the taxpayer were not employees for the purposes of section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth). The employer was therefore not required to make superannuation contributions in respect of those individuals. Senior Member McCabe noted that his decision turned on the peculiar facts of this case.

  • On 10 April 2014, the Commonwealth Superannuation Corporation issued a media release advising that from 1 July 2014 monies rolled into Public Sector Superannuation Scheme accounts since 1 January 1996 can be transferred to another super fund, together with government contributions paid into the accounts. Voluntary super contributions made after age.

  • On 11 April 2014, the ATO withdrew the following Interpretative Decisions:
    • ATO ID 2002/368: Superannuation. Pt IX taxation of superannuation entities. Segregated pension assets. Valuation of current pension liabilities; 
    • ATO ID 2002/378: Superannuation. Retirement income entities: Late lodgment of election to be regulated; and 
    • ATO ID 2002/998: Income Tax. Retirement income entities - In-house Assets / Re-investment in a related unit trust.

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.