SUPERCentral News
One of the anomalies of the "Fair and Sustainable" superannuation changes was to prevent a transition to retirement income stream (TRIS) which was reversionary from transferring to a beneficiary if the beneficiary was not in retirement phase at the date of transfer. This anomalous outcome will soon be consigned to history with legislation currently before Parliament to permit a reversionary TRIS to transfer to the nominated reversionary beneficiary whether or not the beneficiary is in retirement phase.
Both the Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) have recently released superannuation statistics. The APRA statistics are up to March 2018 while the ATO statistics are up to the 2015/16 financial year.
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The proposal to include the outstanding debt of a limited recourse borrowing arrangement in the total superannuation balance of participating members has been substantially modified.
For reasons known only to the Government, it has been proposed that all superannuation funds (including self managed superannuation funds and small APRA regulated funds) must have a "retirement income" covenant. This covenant will require trustees of superannuation funds to consider the retirement income needs and preferences of their members.
From the perspective of a self managed superannuation fund this year's budget changes are fairly tame and few in number. In fact, there are three relevant substantive changes, none of which are negative. Additionally, there are a number of changes intended to improve administrative procedures. This issue of SUPERCentral news will concentrate on the substantive issues - their benefits and their downsides.
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The Government is proposing the introduction of new measures that will impact all Limited Recourse Borrowing Arrangements (LRBA), entered into or after 1 July 2018. These measures, if enacted, will include a member's share of any outstanding LRBA debt in the calculation of their total superannuation balance, which may have a flow-on effect on that member's ability to make contributions, including catch-up contributions.
As the Financial Services Royal Commission continues, it's provides a timely reminder to ensure your funds are compliant.
The ATO has released key superannuation thresholds which are to apply to the 2018/19 financial year.
The Australian Prudential Regulation Authority (APRA) has released its latest quarterly superannuation statistics report. The quarterly statistics relate to the December 2017 quarter.
The leader of the Opposition has proposed that excess dividend imputation credits should not be refundable to superannuation funds and that he intends, if he forms Government after the next election, to implement that proposal.
The legislation to implement this scheme was enacted in December 2017 and will apply from 1 July 2018. In broad terms, this scheme permits individuals to withdraw (up to certain limits) the amount of their voluntary superannuation contributions plus associated earnings for the purpose of purchasing their first home.
The Government has now moved to resolve the issue of reversionary TRISs, which has been dragging on since 1 July 2017 when the "Fair and Sustainable Superannuation" changes commenced.
It is clear that the 1 July 2017 so-called 'fair and sustainable' changes to the superannuation laws affect the estate plan of every working Australian - whether they have actually formulated such a plan or not.
The legislation to implement this measure was enacted in December 2017. The measure applies from 1 July 2018 and permits individuals to apply the proceeds from the sale of a current or former principal place of residence as an additional superannuation contribution.
So what is this "estate planning transfer balance cap trap" that can arise from adopting the mirror reversionary pension strategy? And more importantly, is there a way to avoid it?
The ATO has reissued the transfer balance account report (TBAR) form to make it more user friendly. The rebooted form permits up to four TBAR events to be reported. A TBAR event is an event which generates either a transfer balance credit or debit to arise.
The ATO has also made life easier for SMSF trustees by relaxing the rules relating to the lodgement dates of TBAR reports.
Despite the "standard" reporting due dates for TBARs set out above, if a member has exceeded their transfer balance cap, then the trustee must report the following TBAR events in shorter time periods.