1 July 2017 saw the biggest changes to the taxation of superannuation in a decade come into effect. One area that continues to create headaches for advisers is the temporary transitional capital gains tax (CGT) relief.
Trustees of superannuation funds, including self-managed funds, who adjust their asset allocations to comply with the transfer balance cap and transition-to-retirement income stream reforms that commenced on 1 July 2017, can claim this temporary transitional CGT relief. For many, however, this relief expires 15 May 2018.
Guidance from the Australian Taxation Office indicates that applying the CGT relief resets the cost base of an asset to its market value (as determined under the valuation guidelines for SMSFs on the date the relief applies) and allows you to defer a capital gain that arises when resetting the cost base for assets where you use the proportionate method.
We spoke with self-professed 'superannuation nerd' Jemma Sanderson CTA about the ‘CGT relief seminar’ session she presented at the WA Superannuation Intensive in March, and here look at some of the issues she covered.
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| Jemma Sanderson, CTA |
Jemma is also the subject convenor of the Institute’s Advanced Superannuation subject, which is open for enrolments in Study Period 2 now.
Jemma told us “the new superannuation rules are complex and, as they are new, guidance and strategies are evolving as the year has progressed. The content I presented at March’s Superannuation Intensive was designed to assist delegates to get an up-to-date lay of the land regarding the rules, as well as provide them with the strategies to assist them in optimising their clients' SMSFs.”
“My session looked in detail at the CGT relief that is applicable for superannuation funds for the 2016/17 year. With the 30 June 2018 lodgement deadline for SMSFs, if a fund hasn’t claimed the CGT relief by then, then it is no longer available. The session outlined the various methods for calculation and eligibility, as well as the process to undertake for the relief to be claimed, depending on the method nominated.”
In the session, Jemma considered eligibility, different calculation methodologies, the operation of the deferral provisions, as well as the relevant disclosures for the relief, all within a case study context.
An excerpt of the issues covered in the session is available for download here (PDF).
In addition to convening The Tax Institute’s Advanced Superannuation subject, Jemma is a regular presenter on superannuation issues at Institute events. As an Institute member for more than a decade, she has been involved in committees locally and on a national level, as well as the WA State Council.
Australia’s superannuation industry is the third largest private pension fund market in the world. As it continues to grow, so will the need for experienced, skilled advisers. The Tax Institute’s Advanced Superannuation subject builds on a working knowledge of super to develop insights and expertise across a broad range of issues.
Delivered over a series of modules, the subject provides extensive training on contributions, pensions, the investment rules, the taxation of superannuation funds, retirement planning opportunities and estate planning with respect to SMSFs.
Jemma said: “Superannuation is an interesting space to work in, with the recent changes coming through – one that is very complex, so getting it right for our clients is so important. I’m passionate about SMSFs and making sure that SMSF Trustees are optimising the use of their funds for their retirement and beyond.”
As a Director of Cooper Partners Financial Services in Perth, Jemma heads up her firm's SMSF specialist services, providing strategic advice on SMSFs and estate planning to clients, as well as technical support to accounting, legal and financial planning groups. She is also the author of the SMSF Guide, published by The Tax Institute, and was recently named SMSF Adviser of the Year at the 2017 National Women in Finance awards.
