Discussion paper – retirement products

The Government released a discussion paper on the framework for funds to issue ‘MyRetirement products’. The discussion paper seeks feedback to assist with the framework relating to:

• the structure and minimum requirements,

• the framework for regulating, and

• the offering of a MyRetirement product (i.e. facilitate the ability for trustees to provide an easier transition into retirement for individuals, and other actions necessary meet this objective). Submissions are due by 28 April 2017.

Superannuation Reform Package – Regulations

Treasury released a further tranche of draft regulations relating to superannuation reform for consultation. The draft regulations relate to items such as:

• Lowering the annual non-concessional cap,

• Improving access to tax deductions for personal contributions, and

• Implementing the transfer balance cap.

We will keep you updated on changes that result from the consultation process.

Superannuation Guarantee – Senate Inquiry

On 1 December 2016, the Senate referred an inquiry into the non-payment of superannuation guarantee to the Senate Economics References Committee. The terms of reference can be accessed here. The report is to be issued by 22 March 2017.

Privatisation and Infrastructure – Australian Federal Tax Framework (January 2017 Draft)

The ATO released a draft framework for discussion, which sets out the framework and the ATO’s overall position on a range of infrastructure-related tax issues. The ATO indicated this framework is intended to be a living document and will be updated as new transactions and issues emerge. The ATO has also outlined in the document the areas of concern and where it intends to focus its compliance activity.

Although this document is only in draft at present and may change following consultation with industry, it provides some insight into the ATO’s views on particular arrangements. As superannuation funds are regular investors in infrastructure investments, they should consider the ATO’s views in evaluating the risks associated with such investments. Refer to our Taxtalk Alert for further information.

Stapled Structures – Taxpayer Alert TA 2017/1

On 31 January 2017, the Tax Commissioner released TA 2017/1, expressing his concern about stapled structures where trading income is re-characterised as passive income and diverted through a flow through trust. The ATO identified the following arrangements as being of concern:

• Finance staple,

• Synthetic equity staple,

• Royalty staple, and

• Rental staple.

As superannuation funds may set up or invest in staple structures, it is important to understand the ATOposition and engage with the ATO when contemplating such investment structures.

Superannuation changes – ATO update

The ATO released an update for APRA regulated funds on the budget measures that recently received Royal Assent. The ATO also indicated their website will be progressively updated to provide further guidance for funds. Superannuation funds should ensure their websites and publications are updated for the numerous changes that generally apply from 1 July 2017.