ASFA Action Issue 956, 23 July 2024
In this issue:
- Non-arm’s length income and capital gains: tax determination
- Transfer balance amendments for capped DB income streams in SFTs: ATO alert
- Upcoming changes to First Home Super Saver Scheme: ATO guidance
- AUSTRAC’s National Risk Assessment webinars
Non-arm’s length income and capital gains: tax determination
The ATO has issued the final version of a new tax determination addressing the interaction of the non-arm’s length income (NALI) and capital gains tax (CGT) rules for superannuation funds.
TD 2024/5 Income tax: how the non-arm’s length income and capital gains tax provisions interact to determine the amount of statutory income that is non-arm’s length income outlines the ATO’s views as to how the NALI and CGT provisions interact where a capital gain arises as a result of non-arm’s length dealings. The Determination has retrospective effect.
The ATO consulted on a draft of the determination last year – see ASFA Action issue 905 for background.
Transfer balance amendments for capped DB income streams in SFTs: ATO alert
As reported in ASFA Action issue 954, the Government recently registered the Income Tax Assessment Amendment (Superannuation) Regulations 2024. These amended the income tax regulations to ensure that individuals with a capped defined benefit income stream are not adversely impacted in the event of a Successor Fund Transfer (SFT).
The ATO has now issued CRT Alert 001/2004 to draw attention to the amendments, which will be applied retrospectively from 1 July 2017.
The ATO notes that it “will be working closely with impacted superannuation funds to adjust the transfer balance accounts of recipients of capped defined benefit income streams adversely affected”.
Upcoming changes to First Home Super Saver Scheme: ATO guidance
The ATO has put funds on notice about upcoming amendments to the First Home Super Saver Scheme (FHSSS) which will take effect from 15 September.
The Treasury Laws Amendment (2023 Measures No 3) Act 2023 made a number of technical amendments to improve the operation of the FHSS, including:
- increasing the discretion of the Commissioner of Taxation to amend and revoke FHSS Scheme determinations
- allowing individuals to withdraw or amend FHSSS applications
- clarifying the treatment of FHSSS amounts returned by the Commissioner to funds.
The ATO has now published some guidance for superannuation funds. This notes that while processes will stay the same, the effect of the amendments is that amounts released under the FHSSS may, in some limited cases, be returned to the member’s fund and funds must be prepared to accept these repayments of FHSSS amounts. The repayments process will happen outside of SuperStream, and the ATO will send correspondence to funds via Online services for business.
See ASFA Action issue 941 for background in relation to these amendments.
AUSTRAC’s National Risk Assessment webinars
AUSTRAC has released the national risk assessments about money laundering and terrorism financing in Australia, joining the national risk assessment for proliferation financing in Australia released in December 2022.
These in-depth assessments provide an overview of the threats and vulnerabilities associated with money laundering, terrorism financing and proliferation financing (ML/TF/PF) in Australia.
AUSTRAC recently updated Money laundering/terrorism financing risk assessment guidance which helps Reporting Entities (REs) identify and assess the level of ML/TF risk to their business or organisation. REs must take into account AUSTRAC guidance and feedback relevant to their ML/TF risks when they develop or update their ML/TF risk assessment.
In July and August AUSTRAC will host webinars providing an opportunity for REs to hear about the key findings of the national risk assessments, and emerging themes in Australia’s risk environment. These will help REs understand the ML/TF/PF risks they may face, so they can ensure they have the appropriate systems and controls in place.
REs can register to attend a session for their industry sector using the links below – the webinars that may be relevant to ASFA members include:
- Monday 29 July – 10.00am (Banking)
- Wednesday 31 July – 10.00am (Financial Services)
- Thursday 1 August – 10.00am (Financial Services)
- Thursday 1 August – 2.00pm (Banking)
- Friday 2 August – 10.00am (General)
If you are unable to attend these webinars, industry-specific webinars will also be recorded and published on AUSTRAC’s YouTube channel.
If you have any questions about the webinars, please email AUSTRAC at Industry_Education_and_Outreach@austrac.gov.au.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.