Sent: 06-10-2009 13:03:01
In this issue:
Return to full article list
HomeFree weekly newsletterSelf Managed Super Fund ArticlesContact usLogin
Anti-detriment Augmentations and the Contributions Cap
A few weeks ago the ATO released minutes for the June meeting of the National Tax Liaison Group Superannuation Technical Sub-group.
The minutes from these meetings are always worth a read.
The latest minutes contain an item about "anti-detriment augmentations and the contributions cap".
Anti-detriment augmentations are amounts returned to the dependants of a super fund's deceased member. The amounts notionally relate to the tax on contributions that a super fund member has paid whilst alive. Upon death the contributions tax amounts are handed back to the member.
A super fund claims the additional amounts paid on death via tax deductions.
The ATO state that if the anti-detriment augmentation is paid from a reserve then it will be a concessional contribution.
"In respect of a self-managed superannuation fund, the Tax Office expects the augmentation to usually be made from a reserve," says the NTLG minutes.
These minutes then proceed to discuss a number of ways the anti-detriment payments can be made.
This additional death benefit payment (or augmentation as the ATO call it) is important but I'm yet to be convinced that the additional expense of running a special reserve account to enable the payment to be made is worthwhile in many cases.
Perhaps someone needs to do a cost/benefit analysis?
Agricultural Scheme Tax Issues
On another note the ATO has released a number of draft tax determinations about agricultural schemes. The rulings are timely given the financial difficulties several schemes have been in over the last few months.
The draft determinations are quite generous to investors. Nevertheless anyone relying on a previously issued Product Ruling for their deduction need to be careful especially where the manager of a scheme changes and there is then a material change to the implementation of a scheme.
Non-resident super fund
In late September the AAT published a decision on a non-resident Self Managed Super Fund. The case involved the old law but provides some good guidance on several issues espcially the "central control and management issue". You can read the judgement at the following link: http://www.atcbiz.com.au/r.php?r=kf9r5c0
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.