Loss Relief For Australian Super Funds

by Mary Swire, Tax-News.com, Hong Kong

26 March 2010

Australia’s Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has welcomed the commencement on March 25 of the amendments to the tax laws to provide loss relief for superannuation funds that merge.

The loss relief measure removes significant income tax impediments to mergers between complying superannuation funds. These amendments will permit eligible entities to roll-over capital losses and revenue losses under the merger, and to transfer previously realised capital losses and revenue losses.

"This is a temporary measure in the light of uncertain conditions in the global economy and the global financial market turmoil that existed around the time the measure was announced, with limited application from 24 December 2008 until 30 June 2011," Bowen said.

He added that the government has also noted the concerns of industry regarding the operation of the provisions in respect of directly held assets. The amendments therefore permit merging superannuation funds to access loss relief for losses in respect of directly held assets where the fund also holds assets that are a complying superannuation first home saver account, life insurance policy or units in a pooled superannuation trust.

"This measure is one part of the government’s efforts to improve efficiency in superannuation,” he said. In addition, the Super System Review is currently considering how to maximize retirement income for Australians, including through increasing efficiencies, reducing costs and fees and lifting long-term rates of return.

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