“Since an ATO ruling was first issued on this law as a draft in September 2019, the accounting and finance industry have spent over two years asking the Government for the law to be narrowed to its original intent,” said Tony Negline, CA ANZ Superannuation Leader.
The law and ATO ruling forces all super funds to carefully consider if all losses, outgoings and expenditures have justifiably occurred on arm’s length terms.
“The concern is that if finance teams or accountants get any transaction wrong in any super fund, including APRA regulated funds, that fund could pay the highest marginal tax rate at 45% on all it income including realised capital gains,” said Negline.
“There are major consequences for minor errors which means that solutions would have had to be worked through very carefully requiring considerable time and expertise.
“The law and ATO ruling has been a dark cloud over the profession’s head who have been waiting with bated breath for the storm.
“This announcement provides an umbrella of hope that there will be more certainty and specific interpretation to these rules for super funds.
“We look forward to working with the government to narrow these rules so we can build, not deplete the retirement savings of Australians.”