The guideline confirms:
- CGT relief will be available without the need for a transition to retirement income stream in a segregated fund to be commuted back to the accumulation phase on or before 30 June 2017
- With regard to the application of the ‘Part IVA’ anti-avoidance provisions of the tax legislation which are intended to address actions that are taken ahead of 1 July 2017 which appear consistent with obtaining a tax benefit:
- generally speaking, merely starting a pension during the pre-commencement period would not be of concern to the ATO from a Part IVA perspective; however
- a commutation of a pension shortly after its commencement might be scrutinised more closely
Various commentators have expressed the view that extensive conversations are needed with clients to ensure one decision won’t trigger a problem in another area of a client’s portfolio. Individuals who may be affected by the legislation changes should act now to contact their advisors to ensure appropriate actions are taken rather than wait until closer to June 2017.
We will update you as more information becomes available.