Suite 8 / 260 Auburn Road, Hawthorn 3122
Phone: 03 9214 4100
Fax: 03 9818 6008
enquiries@trumpetfinancial.com.au
 
 
eWombat Search
  LATEST FINANCIAL NEWS
 
Hot Issues
Powerful Budgeting, cash flow and Super Tools available on our site.
Australia's leading causes of death - ABS
Australian Dietary Guidelines and healthy eating chart (PDF)
Government introduces first home scheme laws
Are young investors wasting their youth?
ATO granted super enforcement powers
The great Australian (retiree) dream
ATO to release further guidance on reserves
A real-world benchmark for SMSF performance
How is your super going, ready for retirement?
Our 'hardest' SMSF tasks
Lack of literacy promotes unrealistic goals
Young investors: Time is on your side
Is your SMSF retirement-ready?
Key Economic Indicators, 2017 - updated
Investors acting their age
ATO locks in details, addresses panic on real-time reporting
Government ‘undermines’ tax system in new moves on property expenses
Multiple super accounts in a 'gig' society
Why Australian retirees aren't happy and what we can do about it
Doing a budget is a good idea but ....
Technical expert flags estate planning strategies for 2017-18
Government to shut down salary sacrifice loophole
Items that heat up your depreciation deductions
‘Tens of thousands’ of SMSFs at risk with ECPI
Do’s and don’ts of estate planning
LISTO to help boost women’s super
Smart ways to stretch retirement money
Low economic growth likely for years
Recorded Crime - Offenders, 2015-16
Adequacy of savings still a concern among Australians
‘Bank-like heists’ make way for new wave of cyber crime
Give your children a saving and investing edge - for life
Articles archive
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
‘Tens of thousands’ of SMSFs at risk with ECPI

The Actuaries Institute has addressed the ATO with significant concerns about a recent interpretation related to exempt current pension income (ECPI), fearing many SMSFs will make incorrect claims as a result.



       


 


In a letter to the tax office, copying in minister for revenue and financial services Kelly O’Dwyer, the institute referred to the ATO’s recently confirmed view that if an SMSF was fully in pension phase for any part of a tax year, it cannot use the unsegregated method for all of its assets for the whole of that tax year.


Rather than having a choice over whether to segregate certain assets to support pension liabilities, this interpretation assumes assets are ‘deemed’ to be segregated at a point in time if the fund’s only superannuation liabilities are in respect of account based type pensions, the letter said.


“This will force many funds to use two different methods, the segregated and unsegregated methods, to claim ECPI in the same income year, adding administrative complexity. The Actuaries Institute is concerned that this interpretation is at odds with long standing industry practice, potentially putting tens of thousands of funds at risk of claiming ECPI incorrectly,” the letter said.


“We also believe that the ATO’s interpretation does not reflect the policy intent and will add significantly to the compliance costs of funds claiming ECPI with no clear gain to tax revenues.”


The institute has recommended the ATO re-considers its position to allow long standing administrative practices to continue.


“If the ATO believes there is no alternative interpretation than their current view we request clarification be sought from Treasury and that, if necessary, the legislation be amended to match established practice,” the institute said.


“Given the uncertainty this is causing in the industry, we also recommend that the ATO clarifies that it will not be requiring funds to comply with this new interpretation for the 2017 and 2018 income years.”


Speaking to SMSF Adviser, general manager of Accurium, Doug McBirnie, said he hopes this latest lobbying effort will pave the wave for a quick resolution.


“We are very pleased to see the Actuaries Institute address this issue with the ATO on behalf of the SMSF industry. The ATO’s recent guidance on this has put actuarial certificate providers in a difficult position and created uncertainty for SMSF practitioners and their clients,” he said.


 


KATARINA TAURIAN
13 Jul 2017
www.smsfadviser.com




24th-July-2017
Trumpet Financial Pty Ltd ABN 11 443 516 384 Corporate Authorised Representative (No 327756) of Aon Hewitt Financial Advice Limited AFSL 239183 ABN 13 091 225 642
Registered Address: Level 33  201 Kent Street, Sydney NSW 2000 | Sitemap | Disclaimer | Privacy Policy | About Aon Hewitt Positioning