ATO flags ‘imminent’ release of new guidance
A final practical compliance guideline (PCG) which the ATO “knows the marketplace is waiting for” is set to be released within the coming days.
The ATO told SMSF Adviser it believes it will be able to release its final PCG dealing with the superannuation reforms by next week at the latest. The guideline will address the treatment of death benefit income streams ahead of 1 July.
The ATO has already clarified the key points of its position on this issue to SMSF Adviser, which you can access here.
“The PCG will outline that we will not focus compliance activities on instances under the existing law where an income stream has been commuted and placed back into accumulation phase if the income stream had ceased to be a death benefit income stream and was a member benefit income stream for income tax purposes,” said the ATO’s assistant commissioner for superannuation, Kasey Macfarlane.
“This approach will not continue after the new law comes into effect on 1 July. Under those provisions, a death benefit income stream cannot be commuted and placed back into an accumulation phase. In other words, death benefits are not intended to be and cannot be retained in the superannuation system and are required to be paid out to beneficiaries under the new law,” she said.
Ms Macfarlane said she is aware this issue is pressing for the SMSF sector and it is the tax office’s “full intention” to get the guidance out soon.
“It is imminent and we’re looking to go out for a very short consultation period with our key industry consultation group for a couple of days this week, then looking to publish shortly after that.”