superannuation and trusts

The SMSF Association has acknowledged technical amendments to the Division 296 legislation, particularly concerning legacy capital gains and the calculation of superannuation earnings for in-scope members. They are pleased that some of their proposed changes have been incorporated, improving the integrity of earnings calculations and quarantining older deferred gains. However, the Association expresses significant disappointment that other substantive concerns remain unaddressed. A key worry is the potential for SMSFs to face tax liability under Division 296 on amounts that have subsequently declined in value due to market movements or unforeseen circumstances. Conversely, a temporary balance spike at the financial year's end could lead to liabilities in two consecutive years. The Association is also awaiting crucial details in the yet-to-be-released regulations and urges their prompt publication for proper parliamentary scrutiny.

The SMSF Association has welcomed the appointment of Sarah Court as the new Chair of the Australian Securities and Investments Commission (ASIC). The association views her appointment as significant for the self-managed superannuation (SMSF) sector, citing her prior experience as Deputy Chair in strengthening ASIC's enforcement and investigative capabilities. This is considered crucial for SMSFs, particularly in light of recent investment failures that have impacted retirement savings, and emphasizes the need for a strong regulator to detect misconduct and protect superannuation assets. The SMSF Association also noted Ms. Court's appointment as the first woman to lead ASIC, recognizing it as a milestone for Australia's financial regulatory framework and highlighting the importance of her continuity, experience, and leadership during a period of critical regulatory vigilance for the SMSF sector and the broader financial system. The association also acknowledged the service of outgoing ASIC Chair Joseph Longo.

The Institute of Financial Professionals Australia (IFPA) has submitted to Treasury that the proposed cost base reset mechanism in the revised Division 296 bill is fundamentally flawed and could inadvertently tax historical capital gains, contradicting the bill's stated purpose. IFPA argues that the 'all-or-nothing' approach to resetting the cost base to market value as of 30 June 2026 is inequitable, as it forces members to accept a reset that could increase their tax liabilities if assets have fallen in value. They propose allowing members to selectively reset assets or setting the reset amount at the greater of the asset's cost base or market value to align with policy intent.

Major accounting bodies, including Chartered Accountants Australia and New Zealand, CPA Australia, and the Institute of Public Accountants, have raised significant concerns about the revised draft bills for the Division 296 tax. Their joint submission to Treasury highlights that the policy will impose unnecessary administrative work and costs on small superannuation funds, such as SMSFs. A key issue is the proposed requirement for these funds to obtain actuarial certificates for calculations, which the bodies argue is redundant for funds without mixed pension and accumulation accounts and could be addressed through ATO guidance. Further concerns relate to the use of the proportionate approach for determining members' attribution shares. The accounting bodies warn that this could lead to unfair allocation of income and capital gains to members who do not have a beneficial interest in specific assets, contradicting trustee obligations. They, alongside other industry bodies, believe the draft bill requires substantial revision before parliamentary introduction.

High-income earners who have multiple employers and might miss the deadline to apply for a Superannuation Guarantee (SG) employer shortfall exemption certificate (due January 31) may not face significant repercussions. According to an SMSF specialist, failing to obtain this exemption, which prevents employers from paying SG contributions to avoid breaching concessional contribution caps, might be less detrimental than initially thought. Excess concessional contributions are taxed at marginal rates, with a 15% tax offset representing the tax already paid by the super fund. If the deadline is missed, the excess contribution is taxed as income, and the ATO handles the tax liabilities, potentially making the oversight less critical than the implications of not receiving the contribution.

The recently released 3M super bill has maintained its original form, with no significant alterations introduced following the consultation period. This suggests that proposed changes related to superannuation, potentially impacting various aspects of the industry, are moving forward without substantial modification. Specific details on the nature of these changes are not provided in the provided excerpt, but the lack of substantive amendments indicates the government's likely intent to proceed with the bill as drafted.

InterPrac advisers are experiencing a reduction in their platform options, with North and BT among those set to block new business origination. This development, affecting at least five platforms, signifies a shrinking choice for advisers and their clients.

InterPrac advisers are experiencing a reduction in platform options, with North and BT, among at least five other platforms, preventing them from originating new business. This situation arises as the broader advice industry faces challenges, including profit slides for firms like IFA, suggesting a trend towards consolidation and limited access for some advisers.