Our ATO updates blog provides key tax updates and regulatory changes. Stay informed with the latest insights to ensure compliance and informed decision-making.
Changes to Legacy Retirement Products Impacting SMSFs
Recent changes will allow individuals to exit certain Legacy Retirement Products for up to 5 years.
Changes to the law allowing individuals to exit Legacy Retirement Products and reserve provisions came into effect on 7 December 2024.
The changes enable individuals to exit a specified range of Legacy Retirement Products for up to 5 years. The product can be held with any superannuation provider (APRA-regulated Super Fund or Self-Managed Super Fund)
Your member can only exit an eligible Legacy Retirement Product (subject to a fund’s trust deed) if:
- It generally commenced prior to 20 September 2007, or commenced because of a conversion of an earlier legacy product that commenced prior to that date.
- It is a superannuation income stream product that is a
> Lifetime pension or annuity (except if paid from a large-APRA regulated super fund that is a defined benefit fund)
> Life expectancy pension or annuity
> Market-linked pension or annuity.
The changes also impact the treatment of allocations from reserves for the purpose of contribution caps.
ATO Tightens Country-By-Country Reporting Exemptions
The ATO has published a guideline on Country-By-Country (“CBC”) reporting exemption. An entity may be eligible for an exemption from lodging one or more of their CBC reporting statements under specific circumstances.
Apart from exceptional cases, the ATO has 3 defined circumstances where the ATO may grant an exemption from lodging one or more of CBC reporting statements:
- The entity is an Australian CBC reporting parent or a member of a group that is consolidated for accounting purposes with an Australian CBC reporting parent, provided that the group has no foreign operations. “No foreign operations” means that there are no constituent entities or Permanent Establishments (PE) located outside of Australia.
- The annual global income of a foreign CBC reporting parent is A$1 billion or more but falls below the CBC reporting foreign currency threshold in the jurisdiction of the foreign CBC reporting parent.
- An entity is a CBC reporting entity in the preceding year due to its membership of a group of entities but left that group during the CBC reporting year due to a demerger or sale to a third party and will not be a CBC reporting entity under the new structure for the foreseeable future.
Other exemptions for the CBC report, master file, and local file may be available in exceptional circumstances after a review of the facts, circumstances, and consideration of the evidence. In principle, such circumstances would be outside the 3 exemption categories above and in ensuring conformity with the OECD Action 13 recommendations. The ATO expects these exemptions will be granted in very limited circumstances, and the overarching expectation is that the master file and local file will be lodged.
Source: Australian Taxation Office
