The Financial Services Council (FSC) has welcomed the newly passed legislation to provide permanent capital gains tax (CGT) rollover relief for superannuation fund mergers has been but is disappointed the new laws would create more unnecessary taxation on managed funds.
The relief reduced the tax liability that could arise for fund members when super funds merge, and removed a significant barrier to mergers.
The relief was set to expire on 1 July without the Treasury Laws Amendment (2020 Measures No. 1) Bill 2020.
FSC chief executive, Sally Loane, said she welcomed the certainty for mergers by was disappointed the new laws also contained changes which would create more unnecessary taxation on Australia’s managed funds
“This relief has been extended several times, and we are pleased to see the Government delivering on its Budget announcement to make this a permanent policy,” she said.
“However, the legislation also contains changes to the definition of Significant Global Entity (SGE) to include managed investments – this will impose an unnecessary tax compliance burden on Australia’s managed funds.
“A recent survey by Morningstar shows Australia ranks equal last for tax and regulation of managed funds and the SGE change will not help improve our ranking.”