How the ATO is navigating new super tax measures

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February 17, 2017

Continuing the charm offensive deployed at the SMSF Association 2017 conference by tax commissioner Chris Jordan, the ATO’s deputy commissioner for superannuation, James O’Halloran was keen to strike as collaborative a note as possible in taking conference delegates through the tax office’s approach to navigating the new super tax measures.

The ATO’s newly collaborative approach is evidenced by the Superannuation Law Companion Guides (LCGs) it has published on the new legislation. Each LCG is a type of public ruling, which sets out the ATO’s view on how a recently enacted law applies.

The LCGs covering the super reforms have earned praised for their approachable detail – and are certainly easier to read and understand than the legislation itself.

O’Hallloran echoed his boss, saying that the ATO understood that this was a transitional year, and it wanted to work with the industry as much as possible.

“We recognise that this is a journey, and we recognise that some situations that you encounter will differ from the advice, but all that we ask is that you bring these to our attention as early as possible,” he told his SMSF Association audience.

“We recognise that there may be different views, but we are learning together, and we welcome an exchange of views,” he said.

This was not empty rhetoric. The ATO has established a new Super New Measures SMSF Consultation Group, which met for the first time earlier this year, to ensure regular discussion. The tax authority has also agreed with the SMSF Association to consider working groups, and one-on-one discussions, as required.

A key part of the ATO’s preparation to assist practitioners and advisors continues to be in working with its co-regulators, including ASIC, and industry stakeholders to understand the impacts of the new super measures. “We want to continue to build on existing strong and informed relationships to deliver a positive client experience for all of those impacted by the work we do,” said O’Halloran.

The tax office’s overall philosophy is to deal with minor contraventions in a collaborative way, to help trustees rectify them.

The ATO expects its views to be considered as authoritative, but there is almost guaranteed to be confusion, not least about definitions: for example, the Total Super Balance and the Transfer Balance Cap both have $1.6 million maximums, but are not the same thing.

Also, its commitment to more real-time, event-based reporting places a heavy responsibility on an SMSF’s data robustness, and the technology to support that fully may still be a long way off – and a long way from being universal.

 

 



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