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14 Sep 12 NTLG Superannuation Technical Sub-group

On Tuesday 4 September, 2012, Daniel Butler CTA represented The Tax Institute at a meeting of the NTLG Superannuation Technical Sub-group. A number of matters were discussed at that meeting, including: 

  • The range of excess contributions tax decisions that involved taxpayers being out of time by one or several days and suffering a liability for excess contributions tax. Discussions focussed on the appropriateness of such outcomes in light of the policy underpinning the excess contributions tax rules. The Tax Institute noted the need for greater administrative flexibility to cover situations where the taxpayer had relied on some third party such as EFT or BPay to make their contribution. The ATO expressed the view that the law needs to be amended to allow relief to be provided in such situations.
  • The ATO have postponed finalisation of TR 2011/D3 on when a pension ceases and what constitutes a reversionary pension.  Treasury may be providing input to the items being considered.
  • In relation to The Trustee for MH Ghali Superannuation Fund v Commissioner of Taxation [2012] AATA 527, the ATO expressed the view that the term ‘fixed entitlement’ for these purposes does not derive its meaning from the trust loss provisions in schedule 2F of the Income Tax Assessment Act 1936, but instead is to be construed as per TR2006/7 i.e. as having an ordinary meaning. The ATO will issue a decision impact statement (‘DIS’) in response to this decision.
  • The ATO are concerned with the increasing number of SMSFs undertaking limited recourse borrowing arrangements and non-geared unit trust (‘NGUT’) investments where the documents or structure are not compliant or are incorrect, eg, SMSFs investing in a NGUT where the underlying property is used as security in breach of SISR 13.22C.

Members who seek additional detail in relation to the above are encouraged to contact us at Tax Policy. In addition, The Tax Institute’s Superannuation Sub-committee is scheduled to meet next on Tuesday 23 October, 2012. Members who wish to contribute agenda items for discussion at this meeting are also encouraged to contact us at Tax Policy.