01/07/2013

After surviving June 30 there are changes aplenty in the superannuation arena.  Here is a handy summary of nine of those changes to help keep you up to date:

1.    New powers for the ATO on hold – the ATO was to have new powers from 1 July 2013 for contraventions from that date.  These powers were to include making mandatory directions in relation to education of trustees, directions to rectify contraventions in a specified period of time, and issue administrative penalties against trustees for contraventions.  The legislation was not passed and has not come into effect.  Stay tuned to see if there is movement on this when parliament is in session once again in late August.

2.    Superannuation Guarantee contributions increase – the minimum SG contribution will be raised from 9 to 9.25%.  The first increased payments are for the September 2013 quarter which is due by 28 October 2013.

3.    Superannuation Guarantee contributions for 70 year olds – there will be an obligation for employers to now contribute for employees who are 70 years and over as the upper age limit for SG contributions is removed.  Also worth noting that as a result employers may now be able to claim SG contributions as a deduction where employee is over 75 and not covered by an industrial award.

4.    Higher concessional contributions cap - for those aged 60 and over the cap increases from 25k to 35k.  Previous indications of a required balance of 500k to be eligible for the higher cap have been abandoned.  (The increase does not apply to concessional contributions made by 50-59 year olds until 1 July 2014.)

5.    Ability to withdraw excess contributions – individuals can withdraw excess concessional contributions made to their SMSF made from 1 July 2013.  Clarification on this process is still to come.

6.    Auditors must be registered – SMSF Auditors must be registered with ASIC from 1 July.  Auditors have been able to register since 31 January 2013 and must be issued with an SMSF auditor number (‘SAN’).

7.    Ban on off market transfers abandoned – the ‘on again’ ‘off again’ ban has now been removed from the draft legislation before parliament so off market transfers for listed securities remains in place.

8.    Pension minimums increased – the government’s relief on the required minimum pension payments will end with the minimum percentages returning to their ‘pre market downturn’ rates from the 2008/2007 financial year.  This will impact upon both Transition to Retirement and Account Based Pensioners resulting in higher minimum pension payments for the 2013/2014 financial year.

9.    NSW Stamp Duty on Mortgages to continue – another ‘on again’ ‘off again’ and now ‘on again’ situation. Despite promising for years to abolish mortgage duty as part of the original GST deal with the Commonwealth government, NSW just can’t bring itself to give up the revenue and yet again looks likely to defer the abolition which was meant to start from 1 July 2013. SMSFs with corporate trustees who use limited recourse borrowing arrangement to purchase property in NSW will continue to pay state duty on their mortgage documents for the foreseeable future – the only State or Territory still imposing that duty.

For further information, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.