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| Superannuation funds |
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The trustee of a superannuation fund must lodge a Fund income tax and regulatory return (Form F) with the ATO Categories of superannuation funds Complying funds If APRA is satisfied that the legislative conditions are met, then it will give written notice to the trustees of the superannuation fund and the ATO advising of complying superannuation fund status for the year The fund will retain its complying status for tax purposes until it is notified that its status has changed Non-complying funds Where APRA decides that a superannuation fund has not satisfied the legislative conditions, it will give written notice to the funds' trustees (and to the ATO) setting out the reasons for the decision not to issue a notice of compliance The fund will then be classified as a non-complying fund for the year Self managed superannuation funds (SMSF’s) A SMSF is a fund with less than 5 members and which meets the requirements of s.17A of the SISA SMSF’s are typically small complying funds established by people who want to have a more hands on role in running the fund Capital gains Complying funds When calculating a capital gain, a complying fund may choose to use: an indexed cost base (but frozen at 30 September 1999), or apply a 331/3% CGT discount (compared to the 50% discount available to individuals) Non-complying funds are also subject to the capital gains tax provisions like complying funds However, non-complying funds are not eligible for the 331/3% CGT discount Instead, they are entitled to the usual 50% discount – s.115-100 Exempt income Complying funds receive an exemption on any income derived from segregated assets used to pay a current pension liability - s.282B ITAA36 Non-complying funds are not exempted on such income Tax payable Complying funds Complying funds are taxed at the concessional rate of 15% flat on the standard component of their taxable income and at 45% flat on any special component Non-complying funds Non-complying funds are taxed at 45% flat on all of their taxable income Contributions received by superannuation funds
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| Definition |
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A superannuation fund is a particular type of trust fund established specifically to provide retirement or death benefits for members of the fund Superannuation funds which comply with the: Superannuation Industry (Supervision) Act 1993 (SISA) Financial Sector (Collection of Data) Act 2001, and Corporations Act 2001 receive concessional tax treatment on their income, whilst superannuation funds that do not comply with this legislation are taxed at a higher rate The legislation is administered jointly by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) The ATO is also responsible for the administration of the SISA Act to the extent that the Act relates to self managed superannuation funds Role of the APRA and ASIC APRA and ASIC jointly monitor the compliance or otherwise of superannuation funds to the prescribed standards of the legislation These bodies are empowered to:
Calculation of taxable income Assessable income All superannuation funds can derive assessable income from a variety of sources like any other taxpayer Also, the assessable income of superannuation funds includes:
"Special" capital gains Complying funds The general CGT provisions apply to an asset of a complying superannuation fund even if the asset was acquired before 20 September 1985 (i.e. before the normal commencement date of CGT provisions) – s.302 ITAA36 Non-complying funds The special CGT provisions do not apply to non-complying funds Deductions All expenditure incurred in gaining or producing assessable income is generally deductible s.280 and s.287 ITAA36 specifically disallow a deduction for benefits paid to members of a superannuation fund Only complying funds are allowed a deduction for the following:
Tax payable Standard component Under s.285 ITAA36 the standard component is equal to "taxable income less special component" Special component Under s.284 ITAA36 the special component is "the amount remaining after deducting any deductions which relate solely to special income" Under s.273 ITAA36, special income is:
Employer contributions For the 2006/2007 year of income the maximum age-based limits are:
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