This information is for super funds with members who:
expect to have retirement-phase interests greater than $1.6 million on 30 June 2017 and will have to comply with the new transfer balance cap, or
are receiving a transition-to-retirement income stream (TRIS).
To support super funds to comply with changes to the superannuation system that start on 1 July 2017, the government has introduced transitional capital gains tax (CGT) relief for affected funds.
What is transitional CGT relief?
Transitional CGT relief is temporary relief available to super funds for certain CGT assets that will lose the tax exemption in complying with the new transfer balance cap and TRIS.
As trustee of a super fund, you have access to temporary CGT relief if one or more of your members needs to take action to prepare for the changes.
1)Under the new transfer balance cap rules commencing on 1 July 2017, a member may need to reduce amounts currently supporting retirement phase super income streams. They may do this by transferring amounts back to the accumulation phase or withdrawing amounts from super.
2)Under the changes that remove the tax-exempt status of assets that support a TRIS, from 1 July 2017 you will lose the exemption for earnings from assets supporting TRIS and the earnings will be taxable. This is because TRIS will no longer be considered super income streams in retirement phase.
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