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Trustees need certainty on CGT rollover relief: AIST
The Australian Institute of Superannuation Trustees (AIST) has called for the Government to implement capital gains tax (CGT) rollover relief to improve the efficiency of the superannuation system under the MySuper regime.
In a submission to the Treasury the AIST argued that CGT relief for both losses and gains be made available for all funds that make an application to the Australian Prudential Regulation Authority (APRA) to merge no later than 1 October 2013.
The relief should also be made available for those that do not or cannot obtain MySuper authorisation, and are requested to rollover their assets to another MySuper-compliant superannuation entity as a result, the AIST said.
AIST chief executive Fiona Reynolds pointed to the Stronger Super Outcomes of Consultation Process Report (the Costello Report) and the Superannuation System Review, both of which recommended that the Government provide ongoing CGT rollover relief.
The provision of the rollover relief will ensure that funds are not inhibited from merging due to the potentially high CGT costs to members, said Reynolds.
"It is intended that MySuper will result in product rationalisation to further contribute to obtaining economies of scale. This will be a driver of fund rationalisation," Reynolds said.
By providing super funds with rollover relief the Government will allow them to plan for the future with a degree of certainty, she added.
"The possibility that another period of relief may become available is a present impediment to merging. The merger process involves careful planning and expert consultation and many mergers take in excess of 18 months to complete. Merger processes commenced in the next few years will come to fruition about the time of the MySuper transition," Reynolds.
She added that the 2011-12 Federal Budget estimated the CGT rollover relief implemented between 30 June and 30 September 2011 would provide the Government with "no material loss or gain".
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