POWERED BY MOMENTUM MEDIA
ASFA warns on MIT changes
The Association of Superannuation Funds of Australia (ASFA) has expressed concern over the possibility that the Board of Taxation would change the arrangements applying to managed investment trusts (MITs) such that all gains by an MIT were deemed as being on the revenue account.
It has warned that such a move might trigger a wholesale withdrawal of superannuation fund investments from MITs.
In a submission to the Board of Taxation, ASFA pointed out that superannuation funds were major investors in MITs and it would have great concerns over any proposal to treat all gains as being on a revenue account.
“We note that under current legislation, MITs are required to determine whether their gains or losses are on revenue or capital account. It is a question of fact as to which method is most appropriate based on the investment strategy and trading activities of the MIT,” the submission said.
It said from the perspective of a superannuation fund, the arguments for permitting an MIT to treat gains and losses made on disposal of investment assets as being on capital account were the same as those for retaining flow through of character.
“To not do so would trigger a wholesale withdrawal of superannuation funds’ investments from MITs in favour of direct investments or investments through pooled superannuation trusts,” the submission said.
It said from a superannuation industry perspective, fund members would be justifiably concerned that their account balances were being reduced by the impact of extra taxation imposed on technical rather than any public policy/factual grounds.
“The change would produce long-term impacts on superannuation fund members’ retirement incomes and unequal treatment of superannuation fund investments driven principally by the size of the fund the member is in and its capacity to undertake direct investment,” the ASFA submission said.
AUTHOR
Mike Taylor
Recommended for you
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.
As institutional investors grapple with shifting sentiment towards US equities and fresh uncertainty surrounding tariffs, Australia’s Aware Super is sticking to a disciplined, diversified playbook.
Market volatility continued to weigh on fund returns last month, with persistent uncertainty making it difficult to pinpoint how returns will fare in April.
The Association of Superannuation Funds of Australia (ASFA) has called for the incoming government to prioritise “certainty and stability” when it comes to super policy.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
