Financial planners and other sections of the superannuation industry are awaiting formal word from the Australian Taxation Office (ATO) on the status of people who use the new ‘transition to retirement’ rules to draw down a superannuation pension at the same time as topping up their superannuation savings.
The industry’s attention has been drawn to the ATO following statements made to a Senate Estimates Committee hearing by the outgoing Commissioner for Taxation, Michael Carmody, last week.
Carmody indicated that the ATO would not necessarily regard such situations as tax avoidance.
“The ATO’s position, subject to finalisation, is on the face of it, a straightforward application of the law and we would not see grounds for anti-avoidance rules applying in those circumstances,” he said.
Commenting on the ATO’s position, the head of technical services with Macquarie Adviser Services, David Shirlow said Carmody’s statement was welcome because it indicated that the air would be cleared with respect to transition to retirement pensions and further superannuation contributions.
“Until now there has been some prudent caution among advisers about recommending strategies without a clear statement of the ATO’s position, because of a perceived breach of tax avoidance rules,” he said. “The Tax Commissioner has indicated that he will respond promptly to remove this uncertainty.”
