SuperConcepts’ general manager of education, technical services, Peter Burgess, has backed the 2017/18 simplification of the calculation of the exempt current pension income (ECPI) where a self-managed super fund (SMSF) is restructured during the course of the income year.
The change, which Burgess noted wasn’t legislated, but merely the Australian Taxation Office enforcing the correct application of the law, saw SMSFs identify each discrete period of segregation, and then only apply the actuary’s ECPI percentage to income derived during periods when assets were unsegregated.
“In the past, all we would do is apply the actuary’s ECPI percentage to all the income derived during the income year with no regard to whether the income was derived from segregated or unsegregated assets,” he said.
“I note recent calls by some parts of the industry for a return to the ‘good old days’, that is doing away with the need to identify discrete periods and just apply the actuary’s ECPI percentage to all the income derived by the fund during the income year.”
The legislation as it stands, he said, imposes a significant amount of complexity and cost, particularly for funds which may have multiple periods of segregation during the income year.
That approach though, has no material impact on the tax paid by the fund, and, arguably, is open to manipulation by clients timing the disposal of assets to coincide with a period when the fund assets were segregated pension assets.
“So I think there is merit in amending the law and allowing the industry to return to previous practices”, he said
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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