Sent: 01-06-2010 09:39:07
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Super Gearing Laws Adjusted
The last week has seen some fairly amazing events politically especially at the Federal level. Personally I'm growing a bit tired of the goings on and the latest twists and turns.
Whilst all the shenanigans were going on the Government quietly introduced into Parliament proposed new legislation for super gearing last Wednesday.
These new rules propose to completely replace the existing super gearing rules - predominantly found in Sub-section 67(4A) of the Superannuation Industry (Supervision) Act 1993 (C'th) (as amended) with another set of rules to be placed into Sections 67A and 67B of this legislation.
It's proposed that this legislation will apply from the day after it received Royal Assent. And the new rules will apply to arrangements put in place before this date that are refinanced.
You can imagine the confusion most people will make about fitting inside what some industry insiders will call "674A" or "67A" or "67B".
You can see some people absent mindedly continuing to use "674A" not only to structure their arrangement but also as a way to refer to super gearing transactions.
If you believe some media commentators, there Federal election may occur in mid August. If this rumour is accurate then these proposed new laws probably won't have completed their passage through Parliament before it's prorogued. In other words it may be sometime before these new laws actually take effect.
Anyway the upshot of these new laws tells us that super gearing will be around for awhile longer.
The new laws contain adjustments to the current version of the laws. I'll leave it to others to detail what some of these adjustments actually are.
The net effect is, until this new law receives Royal Assent, you need to work with the existing legislation - that is, 674A.
The ATO has also adjusted its Q&A document on this topic. You can view that here: http://www.atcbiz.com.au/r.php?r=585nxdw
On another matter, the ATO released three documents last week in relation to Self Managed Super Funds. One document involves SMSFs running a business.
The other two documents discussed SMSFs buying and selling shares including the thorny issue of when a super fund would be deemed to be operating a share trading business and the tax treatment of losses arising from the disposal of shares and options.
These documents were made available one day and removed from the ATO website the next. I have asked the ATO when they would be finalised again but at the time of 'going to press' I hadn't received a response.
Perhaps in time we might be able to find out what was wrong with the original versions when they were released.
The ATO document about super fund's running a business is still available. It provides some valuable information. You can read that here: http://www.atcbiz.com.au/r.php?r=576bp6a
Finally please consider purchasing a copy of my book. You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The second edition was released in April.
Two 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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