The Government announced on Tue 24.4.2012, that it will amend the income tax law to provide optional loss relief and CGT roll-over for mergers of complying superannuation funds to support the implementation of its MySuper reforms.
The Minister for Financial Services and Superannuation said the proposed loss relief will remove a barrier that would have otherwise prevented some superannuation funds from merging as part of the transition to the MySuper regime.
Mr Shorten said the proposed amendments will provide:
- from 1 June 2012 to 1 July 2017 – optional loss relief for mergers of complying superannuation funds on the same terms and conditions as the former temporary loss relief (Div 310 of the ITAA 1997) with some exceptions including an optional roll-over for capital gains and integrity provisions (see below); and
- from 1 July 2013 to 1 July 2017 – an optional roll-over and loss relief for capital gains and capital losses on mandatory transfers of default members’ benefits and relevant assets to a MySuper product in another complying superannuation fund.
The proposed integrity provisions will specify that losses that are transferred to the receiving entity will be treated as having been made in the income year that they were transferred. The Government said this will prevent the continuing superannuation fund from using the losses to offset gains in earlier income years. The integrity provisions will also prevent the transfer of losses in respect of disposals of assets from the transferring entity to the receiving entity, as that would effectively provide early access to losses in respect of an asset, which continues to be held by the receiving entity. Self-managed superannuation funds (SMSFs) will be excluded from the loss relief as the MySuper requirements do not apply to them, Mr Shorten said.
The Government said it will release a proposal paper on the changes in “the next few weeks”. Exposure draft legislation will be released as soon as practicable after the consultation on the policy design. However, the final legislation is not expected to be introduced until the second half of 2012, Mr Shorten said.
Source: Minister for Financial Services and Superannuation, media release, 24 April 2012
[LTN 77, 24/4]