Key Points from the ATO Super Technical Committee

15 May 2012

The ATO has established a Superannuation Technical Committee as a liaison and discussion forum for practitioner bodies and the ATO to raise and discuss technical and administrative issues affecting superannuation (both SMSFs and non-SMSFs.)

The ATO after each meeting, generally releases to the public the minutes of the meeting.

The minutes for the most recent meeting of the Committee held on 6 March 2012 have recently been released. 

Key points from the minutes are:

  • The Draft Pension Taxation Ruling is planned to be released on or about 30 May 2012.
  • The Draft Limited Recourse Borrowing Ruling planned to be released on 16 May 2012, was released on 23 May 2012.
  • The top three items of significance for practitioners are the Draft Pension Ruling (particularly when a pension ceases, with the consequent loss of tax exemption on earnings), Death Benefits (this partially overlaps with the issue of when a pension ceases) and successor fund transfers.   The last issue is really a matter which is only relevant to non-SMSFs and arises when one fund wishes to merge with another fund.
  • Two technical issues were discussed.  The first related to contributions made via clearing houses.  The second related to the issue of whether a fund could acquire an asset from the estate of a deceased relative.

Contributions via clearing houses – this issue is significant because an employer may make a contribution in June 2012 to a clearing house (with the intention of claiming a deduction in the 2011/12 financial year) but, for various reasons, the clearing house only pays the contribution to the super fund in July.  The ATO’s view is that the time at which a contribution is made is the time when it is received by the trustee (or its agent).  The clearing house is not the agent of the super fund.  Consequently, in the above example the contribution would have been made in the 2012/13 financial year - so it would be deductible to the employer in the 2012/13 financial year and not in the 2011/12 financial year.  The contribution would be assessable to the super fund in respect of the 2012/13 financial year. The contribution would be counted for contribution cap purposes also in the 2012/13 financial year.  However, special legislative provisions apply for the purposes of the SG system. For SG purposes when a contribution is made to an authorised clearing house, it will be treated as being received by the super fund when it is received by the clearing house.  Unfortunately, the only authorised clearing house is Medicare Australia and only small employers are eligible to use the clearing house services provided by them. 

Acquisition from deceased estates – this issue arises because the deceased individual is a relative of a member of the SMSF and the property to be acquired is not business real property.  Generally, a super fund cannot acquire (ie purchase or receive as a contribution) property from a related party (ie a relative of a member of the fund).  An exception applies if the property is business real property.  In the ATO’s view, the question to be asked is whether the executor (or any of the executors) of the estate is a related party; and not whether the deceased individual was a related party.  Whether the executor (or any of the executors) is a related party turns upon the question as to whether the executor (or any of the executors) is a member of the fund, or a relative of the member or whether the member controls (directly or indirectly) the executor (or any of the executors).  If the executor or any executor is a related party then the asset cannot be acquired.  If the executor or none of the executors are a related party then the asset can be acquired.

Back Enquiry