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25 Sep 12 ATO address: Regulation of SMSFs and impact of super reform measures

On 20 September 2012, Stuart Forsyth, Assistant Commissioner, Superannuation, ATO gave an address entitled "Our regulation of SMSFs and how super reform measures may impact you and your clients" to the ICAA National SMSF Conference 2012 Finding Solutions held in Sydney, New South Wales.

In relation to on-time SMSF lodgment rates, Mr Forsyth said:

"On-time SMSF lodgment rates sit at 74%. The overall lodgment rate is just over 92% and while this isn't terrible it's not improving. This is not good enough. Failure to lodge by the due date can result in penalties and/or loss of complying status.

In 2012-13 we will target over 1,500 funds that haven't lodged. We'll ask them to lodge and if they don't, we'll consider removing them from the SMSF population."

In relation to the Government's proposal to reduce the tax concessions high income earners receive on their concessional contributions to super, Mr Forsyth said:

"From 1 July 2012, people with adjusted incomes over $300,000 will have tax concessions on their contributions reduced from 30% to 15%, excluding the Medicare levy.

Based on the government's announcement, all concessional super contributions will be included in the income test. This includes:

  • employer contributions (both SG and salary sacrifice)
  • personal contributions for which a deduction has been claimed.

For members of defined benefit funds (both funded and unfunded schemes) it will include all of their notional employer contributions.

It's important to note that this measure won't apply to concessional contributions that are subject to [excess contributions tax].

It's estimated that the reduced tax concessions will affect about 128,000 people in the 2012-13 financial year. This is about 1.2% of those who contribute to super. At this stage, we think the first assessments for this financial year will issue in early 2014.

The government is consulting with industry on the policy detail and legislation hasn't been drafted yet. The implementation of this measure is subject to legislation being enacted."


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