SMSF administrator SuperConcepts has urged Treasury and the federal government to push ahead with a regulation that will prevent SMSFs that only have account-based pensions in their fund from needing to obtain an actuarial certificate if they want to cut costs and red tape.
SuperConcepts technical services and education general manager Peter Burgess told the Tax Institute 2018 National Superannuation Conference in Melbourne last week that Treasury must pass the regulation to be rid of the requirement for clients to obtain actuarial certificates just to confirm 100 per cent of their income is exempt from tax.
“If you’re [Treasury] worried about cutting red tape and costs, forget about three-year audits. This is low hanging fruit. Do this,” Burgess said.
“And then we’ll do away with this nonsense that we have at the minute of clients having to get actuarial certificates just to confirm 100 per cent of their income is exempt from tax.”
The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 states in its explanatory memorandum a regulation will be made in respect of account-based income stream benefits for the proportionate method.
It said SMSF members who use the proportionate method but whose only super income stream benefit liabilities arise from account-based super income stream products will not need to obtain an actuarial certificate to determine their exempt current pension income.
Burgess bemoaned the fact the regulation has not been made, adding at least for 2017/18, accountants are going to need to obtain an actuarial certificate for clients in these situations to confirm their pension balance is 100 per cent exempt from tax.
“And I’ve got to say having had some of those discussions with clients, it’s not an easy discussion to have, to explain to them why they need an actuarial certificate. So that’s just one thing to be aware of,” he said.
