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Government moves to grant CGT relief
Merging superannuation funds could receive capital gains tax (CGT) relief backdated from October 2011 if recent draft exposure legislation makes it through the gauntlet.
The Minister for Financial Services and Superannuation, Bill Shorten, has released exposure draft legislation on income tax relief for merging super funds for comment.
The draft suggests backdating the relief to apply from 1 October 2011, extending relief to all revenue assets regardless of the net position of the entity and removing the 12-month integrity rule.
The Association of Superannuation Funds of Australia (ASFA) president, Pauline Vamos, said the exposure responds to concerns they had raised about the impact of capital gains tax on fund members.
She commended the draft for indicating relief would apply retrospectively and for acknowledging ASFA's concerns about integrity measures.
Without the relief, merging fund members could suffer tax related losses of up to 2 per cent or funds may choose not to merge, which would lead to higher costs and less benefits for members, Vamos said.
ASFA has consistently lobbied the Government for permanent CGT relief for merging super funds but said, at a minimum, it should apply throughout the Stronger Super reforms.
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