Treasury must consider 'small parcels' of shares in SMSFs: ASFA
The Association of Superannuation Funds of Australia (ASFA) has urged Treasury to consider small parcels of shares in the draft exposure for self-managed super funds (SMSF)-related party transfers to avoid the possibility that SMSFs that want to wind down cannot do so.
In a submission on the Treasury’s exposure draft, Tax Laws Amendment (2013 Measures No. 1) Bill 2013: self-managed superannuation funds and related parties, ASFA encouraged Treasury to consider the issues of dealing with small parcels of shares on-market.
Because they were not tradeable on-market, ASFA said, SMSF trustees would need a disposal process.
“An unintended consequence of any hard and fast rule here may be that SMSFs seeking to wind up may not,” it said.
ASFA said the regulations would allow SMSFs to acquire further asset classes from related parties, including shares in unlisted related party companies and unlisted fixed interest types securities, due to the additional safeguards of using an independent qualified adviser.
But ASFA said the term ‘qualified independent valuer’ was only found in a couple of paragraphs and should be included in section 66(5) of the Superannuation Industry (Supervisory) Act.
The industry body recommended that the published unit price of a managed scheme operator be qualified as valued by an independent valuer when acquired from a related party.
It said regulations should confirm that an in-species transfer of an asset bought by the fund at market value should satisfy the exemptions for assets that are disposed of by a fund trustee to related parties for market value.
Asset valuations where a relationship breakdown had caused the disposal of the asset should be exempt, ASFA stated.
“AFSA supports this initiative as clearly there will be independent valuation processes in place as part of the procedure associated with the splitting of assets under such circumstances,” it said.
It did seek clarity however that a change of an unincorporated trustee would not trigger an acquisition or disposal of an asset.
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