Issue: 315
Sent: 05-09-2012 15:08:02
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Advisers Risk Underestimating Long Term InflationYes can be the hardest word part 6ATO's controversial tax ruling on pensions seems to have stalled
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ATO's controversial tax ruling on pensions seems to have stalled

Click here to buy - A How To Book of SMSF's by Tony Negline
Tony Negline

The finalisation of the ATO's controversial tax ruling on pensions seems to have stalled.

According to the future publication schedule of ATO rulings, the release date of the final document has been 'TBA' or To Be Advised since July.

The reason for the delay? "Administrative issues raised by the Ruling are being considered."

I'm not entirely sure what this comment means.

According to the latest minutes for the National Tax Liason Group Superannuation Technical Committee Meeting from June 2012, the Tax Office claims that the final ruling won't contain any major revisions but will have some refinements.

For example instead of a 1 July 2007 start date the ruling might have a 1 July 2012 start date.

Partial commutations may not automatically be taken to be a lump sum. Instead the taxpayer would have to elect to have such payments treated as a lump sum. This is an important issue if you under 60.

The timing of any pension commutation may depend on the facts of each case. (Currently the draft ruling says it will take place with the request for commutation is received.) If commutation occur as soon as a request is received then it will give rise to asset sales in the accumulation phase not the pension phase which will have obvious CGT implications.

The next possible area of refinement involves what is counted towards the minimum income payment. The draft tax ruling says that partial commutations will count towards the minimum income payment but full commutations do not. The NTLG minutes say that this interpretation may not change but instead of being in the tax ruling it might move to a SMSF Determination.

Clearly there is a lot more water to flow under the bridge before all these pension issues are straightened out.

On another issue some of you might be wondering about my book. I'm happy to say that my book has been updated and is about to be published by Thompson Reuters as 'The Essential SMSF Guide". Further details are available here:

http://www.thomsonreuters.com.au/the-essential-smsf-guide-2012-13/productdetail/116875


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