The Government should embrace the Productivity Commission’s (PC’s) recommendation for making the current temporary tax rollover relief for fund mergers and transfer events permanent, according to major consultancy, KPMG.
In an analysis released this week, KPMG Tax Director, Ross Stephens said that given the ongoing regulatory and political exhortation to increase the numbers of mergers in the superannuation sector aimed at removing under-performing funds “anything else would have been a disappointment”.
“… we must hope the PC’s clear recommendation for legislation in this area will be taken on by the government, as it has been curious to see tax policy contradicting the government’s overall stance - as well as being inconsistent with the permanent relief provided for a number of restructures for other types of businesses,” he said.
Stephens said the relief enabled the closing fund in a merger to transfer its unrealised tax positions to the ongoing fund along with the relevant assets.
“Without the relief, these unrealised tax positions are crystallised at the date of merger. With a number of funds having exhausted capital losses and being in an unrealised net capital gains position, this gives rise to a cash cost in the absence of rollover relief, and represents a potential impediment to a successful merger,” he said.
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.