POWERED BY MOMENTUM MEDIA
Tax takes centre-stage in trans-Tasman transfer concerns
The Australian Institute of Superannuation Trustees (AIST) has expressed concerns that a lack of tax considerations may complicate the Federal Government's proposal to create a trans-Tasman retirement savings portability plan.
AIST said super funds would need to amend their databases to ensure that monies moving between them were appropriately taxed. It said RBSs should be uniform across both countries, which may minimise the administration required to separate taxable from tax-free monies.
AIST said funds that did not choose to accept transfers from KiwiSaver accounts might still need to build additional tax information into their systems, as they would not have the same flexibility when accepting payments from other Australian Prudential Regulation Authority (APRA)-regulated super funds.
The Association of Superannuation Funds of Australia (ASFA) agreed that across-the-board data systems amendments would be needed. However, unlike AIST, it said the cost would be significant, especially in light of already-scheduled IT development work.
New rules would also need to be imposed to ensure that the systems of funds which chose to allow the transfers were able to process them in accordance with tax rules, AIST said.
AIST argued that the consideration of monies as a non-concessional contribution only once these monies hit Australian shores was inconsistent with aims to develop a seamless common market. It called for KiwiSaver providers to be bound by the same processes as APRA-regulated funds in regards to transferring contributions.
The SMSF Professionals' Association of Australia (SPAA) also responded to the Government's proposal and said cutting SMSFs out of any trans-Tasman portability scheme was "discriminatory and counter-productive".
SPAA chief executive Andrea Slattery said in light of the Cooper Review findings on SMSFs - which said they were largely successful and a well-functioning part of the system - the sector should not be excluded.
She said the Australian Taxation Office (ATO) had reported that SMSF taxation and super law compliance was high. SMSFs' suitability as a destination for New Zealand-sourced retirement savings was strengthened by the compliance-based regulation administered by the ATO, according to Slattery.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Treasurer Jim Chalmers delivered the Albanese government’s third federal budget on Tuesday evening, 14 May, touting a balanced approach in an environment of cross currents.
The financial services software company announced it detected unauthorised access of its GitHub user space over the weekend.
Increased regulatory reform and competitive pressures have meant most corporate funds are struggling to meet the scale required to survive, an industry professional says.
The final draft of the $3 million super tax legislation remains unchanged and will include the taxing of unrealised gains and no indexation.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
66.99 3 y p.a(%)
2
Hills International
59.27 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
32.82 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
32.44 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.01 3 y p.a(%)
Add new comment