On 6 November 2013, Treasurer Joe Hockey announced the Government’s decision to abandon some of Labor’s proposed tax and superannuation initiatives.
Included on the scrapheap is the tax on earnings on super assets supporting retirement income streams.
We released an alert on our website on this measure back in April 2013 when it was first announced (click here to access the alert) but to summarise, this measure would have taxed earnings on assets supporting pensions that were over $100,000 per person in a year. The proposal was deemed ‘undeliverable’ by the new Government due to the complexity and high cost involved in its administration.
There are also a number of other superannuation initiatives that the Government is still considering whether or not to implement, including:
- new rules for the acquisition and disposal of certain assets between SMSFs and related parties; and
- a new administrative directions and penalties framework giving the ATO flexible and cost-effective penalty options when dealing with SMSFs that breach the law.
It is expected that these will be determined by 1 December 2013.