News

Business News

Law firm backs reversionary pension provision

The proposed 12-month grace period for reversionary pensions before pensions are counted for the $1.6 million transfer balance cap has been welcomed by Townsends Business and Corporate Lawyers.

The exposure draft superannuation reforms previously proposed a six-month period.

“One change the government has made in the [Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016], compared to the exposure draft, is that reversionary pensions will now be ‘counted’ for the purposes of the $1.6 million pension transfer cap 12 months after the pension transfers,” Townsends Business & Corporate Lawyers superannuation special counsel Michael Hallinan said today.

“Previously, the transferred pension was counted six months after it transferred.

“Obviously the government and its advisers have considered at least one comment on the exposure draft and modified their position.”

Hallinan said the change was reasonable and welcome.

Earlier this week, the SMSF Association said it was heartening the government had made a number of important technical adjustments to the legislation to reduce its complexity.

“Our association advocated that there were a number of technical issues with the government’s draft legislation and we are pleased that the government has listened to the concerns of the SMSF sector,” SMSF Association chief executive Andrea Slattery noted.

“Improvements such as allowing recipients of reversionary pensions 12 months rather than the originally proposed six months to adjust their affairs for the new transfer balance cap and simplifying the capital gains tax relief provisions are welcomed.”

On 9 November, Treasurer Scott Morrison presented the three superannuation-related bills to Parliament – the Superannuation (Objective) Bill, Fair and Sustainable Superannuation Bill and Excess Transfer Balance Tax Bill.

Copyright © SMS Magazine 2022

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital