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ASFA points to MySuper CGT issues
The Association of Superannuation Funds of Australia (ASFA) has renewed its call for the Government to provide Capital Gains Tax roll-over relief - this time in the context of the implementation of MySuper.
In its submission to the Parliamentary Joint Committee reviewing the Stronger Super legislation, ASFA has argued that the absence of CGT roll-over relief and the fact that many funds are carrying deferred tax assets may necessitate many trustees to expend considerable time and resources creating a MySuper offering which would otherwise not have needed to be created.
"We note that CGT relief may be granted where APRA forces a fund to merge after the MySuper legislation is in place," the submission said. "In our view this is inadequate, as for this to happen the fund would have to establish its MySuper offering first, which would be a waste of resources."
ASFA said it strongly urged that if permanent CGT relief was not provided, then as a minimum, it should be provided from now until 1 July 2014.
It said there was a clear precedent for this, as similar relief was provided during the last Australian Prudential Regulation Authority (APRA) licensing transition period.
"It was also a clear recommendation from the Cooper Panel that such relief be provided in recognition of the extent of the transformation of the industry that Stronger Super will drive," the ASFA submission said.
"The absence of CGT roll-over relief creates a significant barrier to fund mergers," it said.
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