The ATO has published LCG 2016/8 Superannuation reform: transfer balance cap and transition-to-retirement reforms: transitional CGT relief for superannuation funds.
This is the consolidated guideline of the draft that was published in late November last year.
You can access the full guidance here.
Speaking to SMSF Adviser, SuperConcepts’ Peter Burgess said this finalised guidance provides “welcome clarity” around the issue of CGT for transition to retirement income.
"It confirms there will be no need for a TRIS, in an unsegregated fund, to be commuted back to the accumulation phase on our before 30 June 217 in order to be eligible for CGT relief.”
“There’s [also] a section on the application of the anti-avoidance provisions and what they’re saying there is that, generally speaking, merely starting a pension during the pre-commencement period would not be of concern to the ATO, from a Part 4A perspective. However a commutation of a pension shortly after its commencement might be scrutinised more closely, if the purpose of such action appeared consistent with obtaining a tax benefit,” he added.
Perpetual’s Colin Lewis encouraged professionals to be on the front foot with their clients’ portfolios when it comes to CGT, given its complexity and that it is “definitely not one size fits all.”
“I wouldn’t be leaving it until June to get this sorted,” Mr Lewis said.
“There’s enough time now to get it sorted, but it requires a proper conversation with clients,” he said.
Speaking to SMSF Adviser, Verante director Liam Shorte, said professional advisers are still in need of more tools from the ATO to determine figures such as balances across different funds.
He also noted that “no case is simple” when it comes to CGT, and that detailed and extensive conversations are needed with clients to ensure one decision isn’t triggering a problem in another area of a client’s portfolio.
More to come.