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ATO issues ‘key’ clarification for SMSFs

ATO issues ‘key’ clarification for SMSFs

Katarina Taurian
23 September 2014 — 1 minute read

The ATO has updated its available information on transition to retirement income streams, a move which one industry lawyer says could give a “tremendous boost” to a number of SMSF strategies.

In SMSFD 2013/2, the ATO confirmed that an account-based pension can be partially commuted to a lump sum to enable a member to take advantage of their low rate cap, with the low rate cap being $185,000 for the 2014/2015 financial year, DBA Lawyers' director, Daniel Butler, said.

The ATO stated this determination does not apply to an account-based pension that is a transition to retirement income stream (TRIS).

“Thus, the ATO has until very recently had no confirmation on whether a member with a TRIS could implement this strategy,” Mr Butler said.


However, the ATO last week updated its TRIS information online, confirming that to the extent that a member has unrestricted non-preserved benefits (UNPBs) funding their TRIS, they can also partially commute such an amount to take advantage of their low rate cap.

“This ATO clarification is welcome news for many and gives a tremendous boost to a number of key TRIS strategies,” Mr Butler said. “It is very good news, it clears up a lot of that doubt.”

ATO issues ‘key’ clarification for SMSFs
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