There has been a lot of proposed legislative change on the table specifically aimed at the self-managed superannuation fund (SMSF) sector due to come into play at the beginning of the 2014 financial year.
One such item was the mooted amendment to ban off-market transfers of listed securities from related parties into SMSFs.
The logic behind the move was a perception, ill-conceived or otherwise, that SMSF trustees were manipulating the transfer price. In doing so the trustees were in turn manufacturing a price that was favourable to the fund and reflective of the proper value of assets acquired in this manner.
So it was to be that from 1 July 2013 transactions involving the transfer of listed securities from related parties to an SMSF had to be processed via the recognised trading market.
The proposed amendment went further to dictate that transfers of unlisted securities or assets, naturally without a readymade market in which to trade, needed to be supported by a qualified independent valuation.
The suggested changes to the Superannuation Industry Supervision (SIS) Act had the potential to adversely affect SMSF trustees on many levels.
Firstly those trustees who wanted to process off-market asset transfers needed to do so by 30 June 2013 potentially resulting in rushed and poorly timed transactions along the way.
The expedient nature of these strategies to take advantage of an opportunity that was about to end could well have seen many SMSF trustees exceed their contributions caps if consideration was not given to the remaining contribution activities of their respective funds. In turn this would have led to excess contributions tax penalties and as such unnecessary additional expenses associated with running their SMSFs.
Secondly individuals looking to transfer personal assets, such as artwork, would have needed to obtain a qualified valuation to do so. Not necessarily an easy item to source and again another layer of unwanted expense for the fund.
Thankfully though common sense prevailed at the 11th hour when Assistant Treasurer David Bradbury made the decision to throw out the component of the Taxation and Superannuation Laws (2013 Measures No.1) Bill 2013 that contained these proposed amendments.
It’s a result the whole industry wanted and had lobbied for over the past two years or so and naturally a good outcome for SMSF trustees.
Darin Tyson-Chan is the 2012 SPAA Trade Media Journalist of the Year. He is the editor of self managed super, a new publication dedicated to the SMSF practitioner. If you would like a free year’s subscription to the magazine and its associated e-newsletter valued at $100 send your details to info@bmarkmedia.com.au
