The Government has released for public consultation an exposure draft Tax Laws Amendment (2013 Measures No. 1) Bill 2013 relating to acquisitions and disposals of certain assets between self managed superannuation funds (SMSFs) and related parties.
If passed, the Bill will:
- amend the existing prohibition on acquiring assets from related parties so that it applies to all regulated superannuation funds other than SMSFs; and
- introduce a new prohibition on SMSF trustees and investment managers of SMSFs on acquiring assets from related parties, subject to certain exceptions; and
- introduce new rules for SMSF trustees and investment managers when disposing of assets to related parties; and
- introduce a new prohibition on schemes which avoid the operation of these new rules regulating SMSF related party transactions; and
- introduce administrative and civil penalties for contravention of these new rules.
The prohibition on acquiring an asset from a related party will not apply:
- if the asset is a listed security acquired in the way prescribed by the regulations;
- if the asset is business real property of the related party acquired at market value, as determined by a qualified independent valuer;
- if the asset is acquired under a merger between regulated superannuation funds and at market value, as determined by a qualified independent valuer.
A trustee or an investment manger of an SMSF must not dispose of an asset to a related party of the fund, subject to certain exceptions. This applies only to SMSFs.
The exceptions include:
- if the asset is a listed security disposed of in the way prescribed by the regulations;
- if the asset is disposed of for market value, as determined by a qualified independent valuer;
- if the asset is a kind covered by the regulations in force for the purposes of section 62A (about collectables and personal use assets) of the SIS Act, immediately before 1 July 2013;
- if the asset is money;
- if the asset is of a kind that the Regulator, by legislative instrument, determines may be disposed of by SMSFs, or a class of SMSFs;
- if the asset is disposed of accordance with the requirements of subsections 66(2B) and 66(2C), which are about the breakdown of relationships, in the way that those sections apply to the disposal of an asset.
A trustee or investment manager of an SMSF who disposes of an asset to a related party otherwise than in accordance with an exception contravenes a civil penalty provision, to which civil or criminal penalties may be sought by the Regulator.
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Posted 31st December 2012 by David Jacobson in Financial Services, Superannuation