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.
The central bank has served up a disappointment for punters on Melbourne Cup Day.
The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones.
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.