On Tuesday 5 June 2012, Gabrielle Teys FTIA attended a meeting of the NTLG Superannuation Technical Sub-group on behalf of The Tax Institute. At that meeting, participants discussed a range of issues including:
- the security trust relationship in relation to GST, fund reporting, income and expenses;
- whether the proceeds from a life insurance policy held by an SMSF for liquidity purposes would result in the creation of a fund reserve;
- whether under a limited recourse borrowing arrangement it was possible that money applied to acquire a single acquirable asset would be able to be financed via two lenders (i.e. one for the deposit and one for the settlement of funds); and
- in relation to limited recourse borrowing arrangements, whether a situation where a related party loaned funds to the SMSF at a discount or zero rate of interest would satisfy the conditions in s 67A and not be deemed a contribution.
In addition to the above, the ATO undertook to further clarify and communicate their views in relation to the question raised at the forum in relation to the partial allocation of the value of an in specie contribution between a member’s account and a contributions reserve or unallocated contributions account. In this regard, discussion at the meeting primarily focussed on what is considered a single fund-capped contribution for the purposes of sub-regulations 7.04(3) and 7.08(2) of the Superannuation Industry (Supervision) Regulations 1994 (which refer to the allocation of a contribution).
Members who seek further information in relation to the above are encouraged to contact us at Tax Policy.