Issue: 181
Sent: 06-10-2009 12:16:01
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The Chinese are Coming or Maybe Not!Email Marketing Business Opportunity - Helen BairstowWe need more power cuts - Baby Boomers and the Ageing Population!The Easiest way to do a Client NewsletterWhy Warren Buffett won't buy a NewspaperAnti-detriment Augmentations and the Contributions Cap
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Anti-detriment Augmentations and the Contributions Cap

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

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:

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