ATO warned on CGT relief regime

The Australian Taxation Office (ATO) has been warned that its proposed capital gains tax (CGT) relief regime presents significant practical challenges for large, unsegregated superannuation funds.

What is more, the ATO has been told that the cost of complying with the transitional arrangements may be “disproportionate to achieving the intended purpose”.

The Association of Superannuation Funds of Australia (ASFA) has used a submission to the ATO to warn not only of the practice challenges entailed in the proposed new CGT regime flowing from last year’s Budget but of the costs.

Related News:

The ASFA submission said that these practical challenges would mean that superannuation funds might not be able to utilise fully the relief as intended and may incur considerable expense and risk in developing and implementing an interim solution that complies with the legislation.

“This potential loss of tax benefit and the significant, additional, cost involved in complying with the legislative method generally will be borne by the members of affected superannuation funds,” the submission said.

It went on to say that whilst the theory behind the transitional CGT relief was logical, the assessment undertaken by many large unsegregated superannuation funds and their custodians since the legislation was finalised (and even earlier when the exposure draft version was released for consultation) was “that there are significant practical challenges that may prevent them from accessing the relief”.

“The single biggest impediment is that at least some of the custodians of superannuation funds (on whom funds rely for their broader CGT reporting) have indicated that significant upgrades may be necessary to their tax reporting and underlying IT systems to accommodate the relief.




Related Content

Has O’Dwyer let the ‘opt-in’ genie out of the bottle?

The Government has pointed to superannuation balance erosion for young and lower paid fund members as a reason to contemplate making insurance inside ...more

Don’t waterdown scaled advice rules

The rules around the provision of scaled advice should not be watered down just because the banks have difficulty in dealing with them, according to a...more

Cbus CEO wins FEAL Fund Executive of the Year

Cbus chief executive, David Atkin, has been named the winner of the 2017 Fund Executive Association Limited (FEAL) Fund Executive of the Year award.At...more

Author

Comments

Add new comment