Issue 52: Member download
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Download the index for the 2009, 2010 and 2011 issues of the Superannuation Quarterly click here.
DIY Superannuation Manual
Member download: March 2011
The DIY Superannuation Manual is an excellent resource for both the taxpayer running their own SMSF or the professional who may be operating funds for their clients.
The manual is available in paper and electronic formats.
Purchase the paper DIY Superannuation Manual here.
Members can download the Electronic DIY Superannuation Manual here.
Purchase the paper DIY Superannuation Manual updates here.
Welcome to Super e-news
The government's willingness for concessions to the mining sector reflect its motivation to win support for the Minerals Resource Rent Tax, having now ear-marked significant resources for related infrastructure works while also being favorably disposed to the resources States receiving better terms in the annual carve-up of the national GST revenue. This followed immediately after it also accepted all the recommendations of the Policy Transition Group that was tasked with advising it on the implementation of the MRRT.
Read the full editorial.
8.4 million Australians to benefit from more super [MR 2011/044]
In a media release issued on 24 March 2011, the Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon. Bill Shorten MP, said that the revenues from the new resource taxation regime, announced by Treasurer, will go towards building superannuation savings.
The Government's historic superannuation reforms include increasing the Superannuation Guarantee to 12% from 1 July 2013. The Guarantee age limit will also rise from 70 to 75. The Government will also contribute to the super savings of low income earners from 1 July 2012, Mr Shorten said.
Read the Minister's full media release here.
Latest SMSF figures
New figures released by the Tax Office on 3 March 2011 (also see item in Regulator Roundup section) show that SMSF assets have increased by 44 per cent over the last two years to $420.6 billion, as the sector further consolidated its position as the largest in the retirement savings industry. Membership in the sector has grown by 13 per cent in the past two years from 743,783 in 2008 to 839,510 in 2110. Around two-thirds of SMSFs only have two members and that only ten per cent have three or more members.
The figures also reveal that the rate of growth in new SMSFs has slowed by three per cent since the global financial crisis.
Trusts Seminars - May and June 2011
Join Roger Timms, TAI's Head of Tax & Superannuation and seminar presenter, in May and June 2011 when he will address the government's announced review of the regime by which trusts are taxed.
- The government has announced a review of the regime by which trusts are taxed. But what is the practical effect?
- Improving the taxation of trust income: Treasury Discussion Paper - March 2011
- What changes might occur and from when are they likely to apply?
- Is the 2011 year 'business as usual'?
- What about the Decision Impact Statement issued by the Tax Office post-Bamford which impacted such things as streaming classes of income, the treatment of franking credits and the taxing of capital gains?
- How should trustee distribution resolutions be framed for the 2011 year - a case study
- Distributions to corporate beneficiaries - hear the latest regarding:
- TR 2010/3 and PS LA 2010/4, and
- strategies which might be adopted to utilise a corporate beneficiary - a case study
- Should taxpayers consider abandoning trusts in favour of, say, companies?
||DATES & VENUE INFO:
• Sydney: Tuesday 3 May - The Menzies
• Melbourne: Tuesday 17 May - Leonda by the Yarra
• Brisbane: Tuesday 26 May - Royal on the Park
• Baulkham Hills: Wednesday 1 June - Crowne Plaza Norwest
Private Member's Bill introduced by Federal Opposition
The Abolition of Age Limit on Payment of the Superannuation Guarantee Charge Bill 2011 was introduced into the Lower House on 28 February 2011. This private member's Bill proposes to abolish the age limit on payment on the Superannuation Guarantee (SG) for employees.
(Please note that SG obligations cease for employees aged 70 or over.)
Cases of interest
Johnston, Byron v Commissioner of Taxation (2011) AATA 20
Whether an administrative penalty for failing to provide a valid notice of intent to claim a superannuation contribution deduction was properly imposed and whether remission of the penalty was warranted
The taxpayer sold an investment property and deposited the sale proceeds into his superannuation account with the intent that they would be tax-deductible contributions. The taxpayer failed to notify his superannuation fund of his intent to claim personal superannuation deductions in his income tax returns within the time limits prescribed in s290-170 of the Income Tax Assessment Act 1997 (ITAA97). The Commissioner disallowed the deductions and increased the taxpayer's taxable income applying an administrative penalty at the rate of 25% for 'lack of reasonable care'
Although the AAT found that the penalty was correctly imposed, it felt that the penalty did not achieve the purpose of encouraging compliance with the law and deterring non-compliance. Therefore they decided to remit the penalty in full having regard to particular circumstances of the case.
Get a copy of the AAT decision here.
Read the Tax Office decision impact statement issued on 11 March 2011 here.
The Taxpayer & the Commissioner of Taxation (2011) AATA 168
Excess contributions tax assessment confirmed
The taxpayer set up a SMSF in 1980. He was the trustee of the fund. The fund was set up for the benefit of the employees of the business conducted by a company of which the taxpayer was a director. The taxpayer was replaced as trustee of the fund in January 2007 by a company that had been established for that purpose. The taxpayer was the only director, member and shareholder of that trustee company. He was also the only member of the fund until another member joined on 30 June 2007.
The fund received a contribution in the amount $1,489,402.31 on 31 July 2006.
In written submissions, the taxpayer argued that it was his intention to have the other member admitted to membership of the fund at the beginning of the 2006-07 financial year rather than on the last day. He attributed the failure to make the appointment earlier to his then accountant.
The AAT noted that the taxpayer was the only member of the fund to whom contributions could be allocated at the relevant time and that the taxpayer's liability for taxation is based on what he (or his agent, which is effectively the same thing at law) actually did do. Therefore, the AAT was satisfied the Commissioner did not have the discretion to ignore what occurred and behave as if the taxpayer had behaved differently.
The AAT held that the objection decision must be affirmed.
Get a copy of the AAT decision here.
Regulator Roundup: Australian Taxation Office |
Read information that has been recently released by the Tax Office
Your Association at work
Meetings with the Tax Office
Taxpayers Australia actively represents its members across a number of committees and forums. Our representations include the compilation of submissions to Treasury and the Tax Office in relation to draft legislation and draft tax rulings and determinations.
A recent meeting that a representative of Taxpayers Australia participated in was of the Superannuation Consultative Committee held in Canberra on 22 March 2011 and the following agenda items were discussed:
• Natural disasters
• Stronger Super issues and consultation
• Excess Contributions Tax
• Tax File Number issues
• Verification and rollovers to SMSFs, and
• Joint pilot exercise on SG compliance between the Tax Office and Industry Funds Forum.
View further recent activities here.
New and proposed legislation
As at the close of parliamentary business on 28 March 2011, several Bills containing superannuation related legislation were still before the Parliament.
To see details of these Bills, please click here.
Question and Answer
I commenced a Transition to Retirement Income Stream (TRIS) on 9 September 2010 from my SMSF.
As my TRIS commenced on a date other than 1 July, is my maximum drawdown for the financial year to 30 June 2011:
(a) 10% of my pension's market value as at the date of commencement, or
(b) the figure calculated at (a) adjusted on a pro-rata basis?
Your maximum drawdown for 2010-11 is the figure calculated under (a).
All information provided (including all publications which may be viewed or downloaded, articles, Q&As, FAQs, calculators, ready reckoners, and other tools) is of a general nature only and is not personal financial advice.
It does not take into account your particular objectives and circumstances.
No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor.
To the fullest extent permitted by law, no person involved in producing, distributing or providing the information for this newsletter (including Taxpayers Australia Incorporated, each of its directors, councillors, employees and contractors and the editors or authors of the information) will be liable in any way for any loss or damage suffered by any person through the use of or access to this information.