ASFA has released submissions on the following superannuation items:

  • SMSF in-house asset exemption for borrowing arrangements – ASFA believes that the Tax Office’s Draft Legislative Instrument – Self Managed Superannuation Funds (Limited Recourse Borrowing Arrangements – In-house Asset Exclusion) Determination 20xx will be effective in meeting its objectives. Broadly, the draft instrument proposes a specific in-house asset exemption under s 71(1) of the SIS Act to provide certainty for SMSF investments in a related trust as part of a limited recourse borrowing arrangement (LRBA).
  • Deduction for personal superannuation contributions: ATO approved form – ASFA has recommended several minor adjustments to the proposed wording for changes to the ATO approved form (NAT 21121) used for deducting personal superannuation contributions.
  • Draft Ruling TR 2013/D7: Apportionment of deductions for superannuation funds – ASFA is generally supportive of the approach adopted in Draft Ruling TR 2013/D7 for the apportionment of deductions for expenses “partly” incurred in gaining non-assessable income: see 2013 LTN 235 [2]. However, ASFA expressed concern that a “piecemeal approach” has been adopted rather than a complete rewrite of Ruling TR 93/17. ASFA is also concerned that the application of the income ratio method in the Draft Ruling may make the calculation of the pension portion of costs more complex. ASFA recommends that the ruling should clearly set out the basic principle that the apportionment method to be adopted is that which gives a “fair and reasonable” assessment in the circumstances. ASFA also said it should be made clearer that the 2 methods set out in the ruling provide a “safe harbor” for trustees but that other methods may be used (where fair and reasonable).

[LTN 23, 5/2/14]