ING wants to be rid of legacy life issues
ING wants the Federal Government to provide capital gains tax (CGT) rollover loss relief for up to two years to facilitate a rationalisation of structures in the superannuation industry, including a move away from investment via life companies.
In a detailed submission to the Cooper Review, ING has argued that the use of life structures represents a legacy issue that has resulted in the addition of complexity and cost.
It said on this basis, the Government might be justified in extending the CGT rollover relief it provided with respect to fund mergers.
“We believe that broader rollover relief is necessary to allow trustees to restructure away from life company investing structures," the ING submission said. “The rollover relief should not rely on there being a successor fund transfer, or on the assets being in a net loss position to access the relief.”
Explaining its position, ING said that while it had originally made sense to leverage the existing life company infrastructure to manage superannuation investments, these advantages had been eroded over the years as superannuation funds had achieved scale in their own right.
“We are left with the legacy of investing via a life company, which involves significant complexity and duplication of effort affecting a significant book of business,” it said. “This legacy is largely no longer an efficient structure, but significant barriers exist to removing the life company.”
It said the restructure to move ownership of assets from the life company to the trustee of the superannuation fund would trigger CGT and consequently trustees often could not conclude that it would be in the best interest of members to change the investing structure.
AUTHOR
Mike Taylor
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
