Call to level out tax concessions for farming sector
In its submission to the 2016 Federal Budget, the SMSF Association has proposed that money transferred from FMDs to superannuation should be taxed at 15 per cent in the superannuation fund, not inclusive of the taxpayer's assessable income for the year.
SMSF Association chief executive, Andrea Slattery, said she was confident that this implementation would benefit the sector.
"Such an initiative would give primary producers an incentive to contribute unused FMD amounts to superannuation to grown their retirement savings," she said.
"Like many other small businesses, their annual incomes can fluctuate widely, and this initiative would assist them in saving for retirement."
Slattery stated that existing capital gains tax (CGT) small business concessions provide a suitable model to contribute FMD amounts to superannuation.
"Since 1999, CGT small business concessions have been available to small business provided the taxpayer has met the relevant conditions imposed," she said.
The submission from the SMSF Association proposed that an amount contributed from an FMD to superannuation, should be a part of the taxpayer's concessional contribution cap in the year it was made.
"When a primary producer withdraws an amount from an FMD, the amount withdrawn, in most circumstances, is included in the taxable income of the deposit holder. But if it is transferred to superannuation it should be taxed at 15 per cent to bring primary producers transferring FMDs to superannuation into line with other concessionally taxed contributions," said Slattery.
"Two of the concessions, the 15-year exemption and the small business retirement exemption, allow tax-free amounts to be contributed to superannuation from the proceeds of selling small business assets, and similar treatment should be accorded when money is transferred from an FMD to superannuation."
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