‘Stringent’ draft tax determination withdrawn
The ATO has withdrawn a draft taxation determination labelled “stringent” by the SMSF Professionals’ Association of Australia.
Draft tax determination TD 2013/D7 was withdrawn yesterday, according to a notice issued by the ATO.
"[TD 2013/D7] provided circumstances of where an asset of a complying superannuation fund are segregated current pension asset[s] under section 295-385 of the Income Tax Assessment Act 1997," said the SMSF Academy's Aaron Dunn.
The draft determination explained the Commissioner’s preliminary view about when an asset of a complying superannuation fund is invested, held in reserve or otherwise being dealt with for the sole purpose of enabling a fund to discharge liabilities payable in respect of superannuation income stream benefits, the ATO stated.
“A number of submissions were received during the course of consultation and it became clear that approaches vary materially across the industry,” the ATO added.
“A new determination dealing specifically with the key issue of bank accounts will be issued in the near future, and the ATO will further consider and consult on the balance of the matter.”
The SMSF Professionals’ Association of Australia (SPAA) made a submission to the ATO regarding the draft determination.
“SPAA believes that the draft tax determination clarifies any doubt as to when an asset of a superannuation fund can be a segregated current pension asset,” the submission stated.
“However we believe that the draft [determination] is too stringent in [its] limitations on how superannuation funds can hold their assets and when a fund must apply the segregated pension.”
“We also believe that the limitations on segregating assets in TD 2013/D7 will mainly affect superannuation funds holding non-fungible assets such as real property and bank accounts, discriminating against superannuation funds that hold those assets as investments.”