19 September 2012
Member accounts saved from tax hit with CGT relief for super
Australia’s peak superannuation body says it’s great news for many fund members that legislation has today been introduced that will allow super funds to merge without triggering an adverse tax event.
The Association of Superannuation Funds of Australia (ASFA) said capital gains tax (CGT) relief for super funds carrying capital losses will ensure the account balances of members are protected.
“Without the CGT relief, fund mergers could lead to members of merging funds suffering tax-related losses of up to two per cent of their super account,” said ASFA chief executive Pauline Vamos. “Or mergers delayed or abandoned all together.
“ASFA has consistently advocated for CGT rollover relief and is pleased the legislation will apply retrospectively from 1 October 2011,” she said.
The CGT rollover relief, initially introduced as a result of the global financial crisis, allowed newly merged entities to carry forward a capital loss to future tax years, ameliorating losses in member accounts. However that relief ended on 30 September 2011.
“ASFA has also consistently advocated for permanent relief in our discussions with Government but at a minimum has recommended the relief apply through the Stronger Super reform period,” said Ms Vamos.
“We are very pleased to see that relief will cover the period from 1 October 2011 to 1 July 2017 as this will provide certainty for many funds planning future strategy.
“The collaborative advocacy efforts involving many super funds contributing details of their situations to Treasury and to the Treasurer’s adviser has clearly illustrated the issue in a compelling way.”
For media inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Rebecca Glenn, GM Marketing and Communications, 0416 170 439
Megan McDougall, Media and Communications Coordinator, (02) 8079 0849
The Association of Superannuation Funds of Australia (ASFA) is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.