Last week the Government put out a “Clayton’s” budget – the “mid-year economic and fiscal outlook when you’re not having a budget” budget!
There were a couple of proposals that have some relevance and some good news.
The good news story is that legislation will be changed to confirm that when a pensioner dies within a Superannuation Fund those assets supporting that pension will continue to be tax-free until the death benefit is paid out.
This is different to the current ATO position whereby the Commissioner argues that the Fund is taxable immediately a pension ceases.
Generally speaking we are able to ensure the documentation that is in place does ensure tax-free nature of a pension throughout however this will certainly make things somewhat easier.
In an attempt to improve their budget deficit, the Government has proposed that “lost Superannuation balances” be paid to the Government on the pretext that the Government will administer these lost superannuation accounts. This proposal probably makes sense as it would be administered by the ATO who probably have the best chance of finding a lost member anyway. It does reinforce the importance of people keeping track of their superannuation balances because there are millions and millions of dollars of unclaimed superannuation balances in Australia.
The bad news – the SMSF Levy will increase from $191 to $259 effective in the 2013/14 financial year.
The concessional treatment of in-house fringe benefits will be scrapped where these benefits are provided utilising salary sacrifice arrangements.
New arrangements will be ineffective from the 22nd of October 2012 however existing arrangements will only cease to be effective on the 1st of April 2014.
The Government has announced it will be less profitable to have a baby! The baby bonus will be reduced to $3,000 for the second and subsequent child however the first child will still attract a bonus of $5,000. As this is to come in to effect 1st of July 2013 it might be too late to think about a new arrival by that date!
The best good news is that there was no real bad news in relation to Superannuation changes! There has been considerable press and written articles about what the Government may or may not do in their attempts to reduce their budget problems and Superannuation was one area that was considered to be attacked. It is encouraging that this has not eventuated and one would hope the government realises the importance of Superannuation and the importance of retaining taxation concessions to encourage it’s continued and greater use by taxpayers.
Liability limited by a scheme approved under Professional Standards Legislation