The ATO has released its September 2013 Super Update which covers the following:
- Changes to the forms used when a member requests a rollover. Importantly, all funds need to be ready to receive electronic portability forms by 5 October 2013.
- The introduction of Division 293 in tax legislation and its impact on tax payments and reporting requirements for defined benefits superannuation funds.
Division 293 reduces the tax benefit for concessional contributions of "very high" income earners. Most high-income individuals will now have to pay a 15% 'taxable contributions' for an income year if their income for surcharge purposes, plus low tax contributions, are greater than the $300,000 threshold.
The ATO uses information reported on an individual's member contributions statement (MCS) or self-managed super fund (SMSF) annual return to determine the low-tax contributed amounts - these are contributions that are concessionally taxed within the superannuation fund.
Defined benefit superannuation fund will now be required to report a new contribution amount when lodging MCSs. Constitutionally protected funds are also required to report all contributions received, despite some contributions made to those funds being exempt from the tax.
Division 293 tax will be applied from 1 July 2012. Assessments for the 2012 - 13 financial year are expected to be issued to affected individuals from January 2014.
The first low income superannuation contribution (LISC) payments are expected to be issued from September 2013. Introduced on 1 July 2012, eligible low-income earners (who have an adjusted tax income of $37,000.00 or less per year) will receive a government superannuation payment that is 15% of their concessional contributions, which includes salary sacrifice payments. The maximum payment will be $500 per year. First expected payments will be issued from September 2013 for members who have lodged a tax return. Payments to members who are not required to lodge a tax return will commence from 1 July 2014.
The ATO's audit program for the member contribution statements has revealed that some superannuation funds are either unaware of TFN exemption codes in their records or are treating them as valid TFNs. Quoting an exemption code, or another number that is not a valid TFN, must be treated in the same way as a failure to quote a TFN.
All superannuation funds (other than SMSFs) must now lodge an MCS every year for all members, even members for whom no contributions have been received. For 2012 - 13 and later financial years the paper version of the form may only be used if the fund has:
- 20 or fewer members; or
- ATO permission to use paper MCS forms, which will only be provided in very limited circumstances.
- The proposed new related party transfer of assets measures for SMSFs are not proceeding.
On 9 September 2013, the ATO updated its website to provide information for trustees of SMSFs about the following:
- making sure the trustee has enough assets, time and skills;
- considering the trustee's options and seeking professional advice;
- understanding the risks and laws; and
- changes to appointing an approved SMSF auditor.
On 10 September 2013, the ATO updated its website to provide further information about setting up an SMSF, covering:
what it means to be a trustee;
- how SMSF is regulated;
- laws, rules and consequences;
- consider appointing a professional for help;
- work out the structure of the fund;
- ensure members are eligible to be trustees;
- check the residency of the fund; and
- create the trust and trust deed.
On 11 September 2013, the ATO updated its website to provide further information about the obligations of APRA-regulated funds with respect to release authorities. The ATO:
- explains the circumstances in which it gives a release authority; and
- outlines that a superannuation fund must give a release authority statement to the ATO and to the member as confirmation that it has released the member's funds in accordance with the authority.