ATO advice and guidance on super issues
The ATO is developing advice and guidance around a number of issues that will affect SMSFs.
Issues which will be impacted include [3938] Superannuation income stream; [3972] Self-managed super funds – education directions; [3975] Super benefits in breach of rules; [3984] Non-arm’s length expenditure; [4042] Ordinary meaning of the term ‘employee’.
Guidance is being sought on the Addendum to Taxation Ruling TR 2013/5 in relation to the superannuation income stream specifically focusing on Income tax: when a superannuation income stream commences and ceases.
TR 2013/5 has been impacted by the legislative amendments flowing from the 2016 budget announcement of the TBC, which limits the superannuation interests that a person can have in retirement phase.
The addendum will update the legislative references in the ruling as a result of these amendments, as well as address other amendments – including to the definition of superannuation income stream benefit.
The guidance is expected to be completed in mid-2023. Completion of this addendum has been delayed due to other higher-priority issues and to enable further consideration of issues relating to reversionary pensions.
[3972] Self-managed super funds – education directions
Guidance is being undertaken on the Final Law Administration Practice Statement.
Education direction for contraventions of the Superannuation Industry (Supervision) Act 1993 (SIS Act).
This Practice Statement will provide guidance to ATO staff on the relevant matters to be considered when deciding whether to give a trustee or a director of a body corporate that is a trustee of a self-managed super fund a written education direction under section 160 of the Superannuation Industry (Supervision) Act 1993.
It is expected to be completed in early 2024.
This issue will be removed from the program in April 2023. Publication of this product has been delayed by the current lack of approved education courses. The ATO will recommence working on this issue when it has confirmation an approved education course will be available.
[3975] Super benefits in breach of rules
Guidance is being undertaken on the Final Law Administration Practice Statement specifically in exercising the Commissioner’s discretion where superannuation benefits are received in breach of legislative requirements.
This Practice Statement will provide guidelines on the Commissioner’s discretion as set out in subsection 304-10(4) of the Income Tax Assessment Act 1997, which may be applied where superannuation benefits are received in breach of legislative requirements.
It is expected to be completed in late 2023.
The ATO is working through and further considering the comments received and technical issues identified after Draft PS LA 2021/D3 was published on 15 December 2021. Publication has been delayed by outstanding technical issues.
Final taxation determination
This guidance will be seeking advice on income tax: how will a superannuation benefit be treated for income tax purposes where the Commissioner determines it would be unreasonable for it to be included in an individual’s assessable income under subsection 304-10(4) of the Income Tax Assessment Act 1997?
This determination will set out the Commissioner’s view on the income tax treatment of a superannuation benefit received by an individual otherwise than in accordance with the payment standards prescribed under subsection 31(1) of the Superannuation Industry (Supervision) Act 1993, where the Commissioner exercises the discretion contained in subsection 304-10(4) of the Income Tax Assessment Act 1997.
It is expected to be completed in late 2023.
The ATO said it is working through and further considering the comments received and technical issues identified after draft TD 2021/D6 was published on 15 December 2021. Publication has been delayed by outstanding technical issues.
[3984] Non-arm’s length expenditure
This will be seeking guidance on the update to Taxation Ruling TR 2010/1 and Income tax: superannuation contributions.
The final update to TR 2010/1 will explain the interaction between the non-arm's length income provisions and the rules concerning superannuation contributions.
It is expected to be completed in late 2023.
Draft TR 2010/1DC published on 28 July 2021.
Appendix 2 of the draft update sets out the Commissioner’s proposed compliance approach for the 2018–19 and later income years in determining when a contribution has been made to the superannuation provider where the non-arm’s length income rules apply. It should be read in conjunction with Law Companion Ruling LCR 2021/2: Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement.
The draft update also reflects the removal of the maximum earnings test for the purpose of deducting personal contributions, which commenced from 1 July 2017.
