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MYEFO & Super Changes 2012

As part of the Federal Government's Mid Year economic review released 22 October 2012 several changes were announced in relation to superannuation and financial advice.

The superannuation announcements focus on\

  • Increasing the SMSF Supervisory Levy to make oversight by the ATO operate on full cost recovery. This will result in an increase in the annual levy to $259 for the 2013-14 year. Additionally the timing of the payments will be moved from part of the annual tax assessment after the SMSF return is lodged to a separate payment cycle such that the levy is paid in the year to which it relates. Presumably late payment will result in the usual type of ATO administrative penalties.
  • Ensuring the death of a pensioner does not result in the assets supporting the pension from being subject to tax on the earnings. This means that the proposal outlined in ATO Draft Tax RulingTR2011/D3 will not apply and the exemption will continue until the death benefit is paid. This will allow disposal of the assets to pay out the death benefit to receive the same capital gains tax treatment as would apply if the pensioner had disposed of the assets while alive.
  • Re-defining lost members, where inactive accounts or those which are un-contactable are transferred to the ATO, to apply to accounts of up to $2,000 instead of $200. Additionally the duration to determine a member as unidentifiable will be reduced from 5 years to 12 months. This will intensify the consolidation of small account balances and also place more value in referencing the Super Seeker facility as part of the advice strategies around superannuation.
  • Aligning the regulatory requirements for advisers in respect of tax advice with those under the Tax Agents Services Act. This will commence from 1 July 2013 with a transitional period until 1 July 2016 for financial planners to satisfy the Tax Agents Services Board of the tax advice competency. Presumably this will mean some form of study and/or assessment.
  • Deferring the introduction of the replacement of the Accountant’s licensing exemption for SMSFs until 1 July 2016. This will mean that accountants will still be able to provide advice on the establishment of an SMSF without an AFSL. While this is a deferral there is no sign that the policy direction is being changed.

If you would like any further information regarding these announcements and what they mean for you and your clients, please don't hesitate to call Multiport on 1300 364 672.

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