..... says the
SMSF Professionals' Association of Australia (SPAA).
SPAA Director - Educational and Professional Standards, who will address this
issue at the organisation's technical conference in Sydney on July 24, believes it is vital the
ATO finalises its draft ruling - sent out for public comment last year - as it
has the potential to impact significantly on members' benefits.
there is the potential for significant additional income tax to be paid if the
trustees get it wrong," he says.
between the income tax law and the SIS legislation has always technically been
a tenuous one as the fit has some uneasy aspects at best, and the delay in
finalising draft ruling (TR 2011/D3) has not helped matters."
revolves around what constitutes the provision of a pension in a fund and
whether the income of the fund supporting that pension is taxed at 15% or tax
there is also uncertainty around the date from which the ruling would take
effect, with the draft ruling stipulating 1 July 2007.
1 July 2007 may be fine for funds that have happened to have done it right,
according to the Commissioner's ruling," he says.
those who have not met the requirements of the ruling due to other quite valid
interpretations of the law, the result could be a very expensive exercise.
offer funds that are in this boat may end up with a larger tax bill to pay.
They may need to amend their systems and reduce the balances of members to pay
the additional tax.
impact unfairly on members who are new to the fund or those who have been in
pension phase for a shorter period than the backdating requires."
By: Andrew Starke
16 July, 2012
Professional Planner http://www.professionalplanner.com.au