Chartered Accountants Superannuation Bulletin 09/2008

Welcome to this edition of the Chartered Accountants Superannuation Bulletin.

Issue No 09 /2008 2 May 2008 1. News and Media Releases 2. ATO Updates 3. Terminal illness benefits 4. Letter to the editor 5. Training and Development

Temporary residents and superannuation

It is the Institute's view that while appreciating the background and the reasoning behind the proposal, it will introduce an unnecessary level of inequity and increased complexity for employers. The Institute also received comment from members who found the proposal to be inequitable for those who wish to save money, while working in Australia.

The Institute’s submission also argues that the proposal would increase 'red tape' and administrative complexity

Online services disclosures

The Institute acknowledges the efforts by the regulator, and the industry in general, to facilitate efficient and effective use of email and the internet to send information delivered in a clear, concise and effective manner.

The Institute supports the proposal based on the fact that Australians have become more confident in the use of electronic mediums, such as the internet and email.

While there are some issues surrounding compliance, which need to be addressed, the Institute believes that the benefits of online disclosure of financial services generally outweigh the compliance risks.

Superannuation equality for same-sex couples

Laws to end discrimination of same-sex couples in relation to superannuation have been introduced to Parliament. The purpose of the Bill is to eliminate discrimination against same-sex couples and the children of same-sex relationships.

Treasury Update

The Hon. Senator Nick Sherry has presented to two Australian associations in Melbourne on Thursday 22 May. Sherry spoke to the Financial Services Association on the Future of Financial Advice in Australia and to the Securities and Derivatives Industry Association on the subject of Positioning Australia in a Global Context

Self paced learning guides for super professionals

From 1 July 2007 a range of legislative and administrative changes to superannuation came into effect. In preparation for these changes ATO staff have completed a number of self paced learning guides which are now available to super professionals.

The following guides are available on the ATO website:

• Changes to super - Overview for super professionals
  Provides an overview about the changes to super from 1 July 2007.
• Simplified Payment Rules – Guide for super professionals
  Explains the new arrangements when paying super benefits from 1 July 2007.
• Co-contributions for the self-employed
  A self paced learning guide for super professionals explaining the new arrangements and eligibility criteria for super co-contributions.
• Fund reporting requirements - Guide for super professionals
  New reporting arrangements for funds from 1 July 2007.
• Unclaimed money and portability - Guide for super professionals
  Provides information about unclaimed money and portability arrangements from 1 July 2007.
• Employment termination payments - Guide for super professionals
  Provides information about new arrangements on employment termination payments from 1 July 2007.
• Indexation and rounding - Guide for super professionals
  Provides information about new arrangements on indexation and rounding from 1 July 2007.
• Super death benefits - Guide for super professionals
  Provides information about new arrangements on super death benefits from 1 July 2007.
• Changes for SMSFs - Guide for super professionals
  Provides information about new arrangements for self managed superannuation funds from 1 July 2007
• Non-quotation of tax file numbers - Guide for super professionals
  Provides information about new arrangements to encourage individuals to provide their TFN to their super fund

A reminder that these self paced learning guides can be part of the training requirements outlined in the recently released Competency Requirements For Auditors Of Self Managed Superannuation Funds released by the joint accounting bodies.

21 May

Superannuation Consultative Committee minutes 31 March 2008

Issues discussed include new initiatives, simplifying and streamlining superannuation, and compliance.

20 May

Important message about SMSF income tax return and personal contributions for self employed

Self employed individuals are entitled to claim a tax deduction for superannuation contributions in their individual tax returns if they comply with a number of rules, as stated in the Supplementary Taxpack.

New pay as you go withholding legislative instrument

In February 2008 the Federal Government announced that the tax-free treatment of super lump sum payments made to individuals with a terminal medical condition would apply to payments made from 1 July 2007, rather than 12 September 2007. These amendments to the tax law are now contained in schedule 7 of the Tax Laws Amendment (2008 Measures No.2) 2008 Bill, which passed the House of Representatives on 14 May 2008.

In anticipation of these amendments the Commissioner of Taxation introduced a new pay as you go withholding legislative instrument.
This instrument:

• revokes legislative instrument F2007L03872 registered on 25 September 2007;
• varies the rate of withholding (to "nil") on all lump sum superannuation payments made on or after 1 July 2007 to eligible members with a terminal medical condition;
• remains in effect until the amendments contained in the Tax Laws Amendment (2008 Measures No. 2) Bill 2008 are passed by Parliament.

Some of the key changes you need to be aware of include:

• The date of commencement is 1 July 2007. Therefore, tax withheld from super lump sum payments made to eligible terminally ill members on or after 1 July 2007 should be refunded by the payer directly to the member, due to the retrospective nature of the withholding variations. The Tax Office will be relying upon affected payees approaching their payer where they may now meet the tax free eligibility criteria.
• Members with a terminal medical condition who have already received a super lump sum payment and had an amount withheld now have up to 90 days to provide you with the required certification to be eligible for a refund.
• If the payment was made in the 2007-08 financial year and amounts were withheld, members have until 30 June 2008 to provide you with certification that they had a terminal medical condition at the time of payment.

Further updates as the legislative process progresses will be posted on the ATO website (www.ato.gov.au) under the 'Whats New" section.

A recent IFA magazine article 'Tax office targets SMSF auditors' expressed comment on auditor independence and SMSF audits. The Instiute has replied with a letter to the editor clarifying some of the details and figures stated in the IFA magazine article. A copy of the response will be in the next CASB

1. Chartered Accountants Business Forum 2008 – ACT
Canberra 3 - 4 June, 2008.
What’s your strategy for the year ahead? Join industry leaders and your peers as vital topics are addressed, key technical updates explored, and new ideas and options examined.

2. Audit of Self Managed Superannuation Funds Update
Throughout June in Adelaide, Perth and Sydney. For those who attended the Audit of Self Managed Super Funds Workshops in 2007, the Audit of Self Managed Super Funds Workshops Update will give you thorough knowledge of the final competency requirements in just a few hours to be ready for 1 July 2008.

3. SMSF Conference DVD 2008
Recorded at the successful inaugural conference in February 2008, this DVD contains all the papers and presentations to view at your convenience.

Disclaimers

This is an initiative of, and has been prepared by the Technical Standards Team of the Institute of Chartered Accountants in Australia. While every effort has been made to ensure the accuracy of the information contained therein, neither the Institute nor its employees shall be liable on any grounds whatsoever in respect of decisions or actions taken as a result of using this publication. The information provided is a general guide only and should not be used, relied on or treated as a substitute for specific professional advice or referral to the relevant specific standard.

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