The Federal Government has moved again to make specific changes to the superannuation tax regime around post-retirement products.
The Assistant Treasurer, Stuart Robert announced the release of exposure draft legislation which he said would amend superannuation legislation to:
- Correct the way that market-linked pensions are valued under the transfer balance when they are commuted or rolled over, resulting in a nil debit.
- Ensure that death benefits that include life insurance proceeds are not subject to tax when they are rolled over to a new superannuation fund.
The minister said the legislation also included amendments that permit the Commissioner of Taxation to account for additional tax debts in running balance accounts.
He said the draft regulations would:
- Fix the valuation of defined benefit pensions under the transfer balance cap to reflect when pensions are permanently reduced following an initial higher payment, such as for some public sector defined benefit reversionary pensions.
- Change the definition of life-expectancy period for innovative income stream products to account properly for the number of days in a leap year.
- Maintain the capped defined benefit treatment of market-linked pensions under the transfer balance cap where they have been rolled over as a result of a successor fund transfer.
- Provide transfer balance cap debit and credit values for innovative income stream products that are paid-off in instalments, ensuring they receive appropriate treatment under the transfer balance cap.
