SPAA State Technical Conference 2013
Some important legislative changes for the self managed super fund sector were not implemented before Parliament rose, Peter Burgess, head of Policy & Technical, AMP SMSF, told the SMSF Professionals’ Association of Australia’s (SPAA) Technical Conference in Sydney today.
Burgess, who was giving a Regulations and Legislation Update to the SPAA delegates, said the changes, relating to trustee penalties, rollover of funds into an SMSF, and tougher penalties for illegal early release would have addressed some legislative shortcomings in the SMSF sector.
“While the scrapping of the proposed banning of off-market transfers was broadly seen as win for the sector, there is evidence that some tightening of the rules is necessary.
“It is likely the Government of the day will need to revisit their position on SMSF off-market transfers and a tightening of the rules, rather than the outright banning of off-market transfers, would be in the best interest of the SMSF sector.
“All of these changes are about strengthening the integrity of the sector and helping to minimise the likelihood of fraud occurring in the SMSF sector – of critical importance at a time when assets under management are about $500 billion.”
The key elements of the proposed changes which were not implemented are:
1. Related party SMSF transactions:
- Banning of off-market SMSF transfers of listed securities;
- Transactions supported by qualified independent valuations.
2. New SMSF trustee penalties:
- Rectification direction;
- Education direction;
- Administrative penalties.
3. Tougher penalties for illegal early release:
- Targeting promoters of illegal early release schemes;
- Illegal early release amounts taxed at a higher MTR
4. Rollovers to an SMSF a designated service for Anti-Money Laundering and Counter Terrorism Financing Act purposes:
- APRA funds required to risk assess and undertake additional ID checks when rolling funds into an SMSF.
Burgess said although these changes failed to make it through the parliament, there were some positive changes that got the thumbs up during the last legislative session.
“In particular, the higher concessional caps introduced for the 2013-14 financial year and the repealing of the excess contributions tax in relation to excess concessional caps were important two changes that enjoyed widespread support across the industry.”
