Sent: 18-01-2011 11:29:11
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Three Issues This Week
Welcome to 2011.
The first issue I want to discuss is TPD insurance premiums paid by super fund trustees. In mid December 2010 the Tax Office released a draft tax ruling on when these insurance premiums would be allowed as a tax deduction.
It needs to be stressed that this ruling applies to TPD insurance costs from 1 July 2011 onwards.
Prior to this date a different set of rules will apply which have been specifically legislated.
In simple terms before July 2011 most super fund trustees will be able to get a tax deduction for their TPD insurance premiums regardless of the terms of insurance.
From that date it is a different matter. Super fund members need to be thinking hard about this matter and only have a few months to come to a decision.
Do they go and attempt to get some new TPD insurance if underwriting is problematic?
One alternative presented in the draft tax ruling is the concept of getting a tax deduction after obtaining an actuarial certificate. (I assume most actuaries would be fairly happy with getting legislated access to more work.)
Obviously it will be some time before the ATO finalise this ruling.
The next issue I want to address is the policy sphere. This will be a fascinating year from a policy perspective.
First cab off the rank is the Future of Financial Advice reforms. There is great pressure on the Government to water down the draft rules and mostly keep the status quo.
With financial advice laws it's possible to pass a lot of law and not achieve an awful lot (one could put the Financial Services Reform rules into this bucket).
An interesting document to read is June Smith's PhD thesis "Professionalism and Ethics in Financial Planning (you can google it). I hope the Government is taking this document into account when framing the FoFA rules.
Avoiding bruising encounters with any important constituency will no doubt be a key objective. High level political influence is paramount.
The next issue is the tax summit which comes hard on the heals of the Henry Tax Reform changes. This "public forum of experts on taxation and its economic and social impacts to discuss the Henry Review" (to quote from the Prime Minister's agreement with Messrs Windsor and Oakshott) is due to be held in the first half of 2011. What changes will be made to super in this talkfest?
Finally please consider purchasing a copy of "A How To Book Of Self Managed Super Funds". You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The 4th edition was released just before Christmas.
For details of the changes made from version 3 to version 4 visit: http://www.atcbiz.com.au/r.php?r=8mz1024
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
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