Income Tax Assessment Amendment Regulations 2007 (No. 2) (90 of 2007)
Schedule 2 Amendments commencing on 1 July 2007
[1] Part 2, after Division 292
insert
Division 306 Roll-overs etc
306-10.01 Roll-over superannuation benefit
For paragraph 306-10 (b) of the Act, a kind of superannuation benefit is a benefit to which the following requirements exist:
(a) the benefit arises from the commutation of a superannuation income stream paid to a person ( person 1 ) because of the death of another person ( person 2 ); and
(b) person 1 was not the spouse of person 2 at the time of person 2’s death.
Note Under section 306-10 of the Act, a superannuation benefit is a roll-over superannuation benefit if it meets the requirements specified in the section. One of the requirements is that the benefit is not a superannuation benefit of a kind specified in the Regulations.
Division 307 Key concepts relating to superannuation benefits
Subdivision 307-D Superannuation interests
307-200.01 Application of Subdivision 307-D to Subdivision 292-D of the Act
For the purposes of calculating an amount of contributions under Subdivision 292-D of the Act, this Subdivision does not apply.
307-200.02 Meaning of superannuation interests
For subsection 307-200 (2) of the Act, every amount, benefit or entitlement that a member holds in a superannuation plan is to be treated as 1 superannuation interest in the relevant superannuation fund unless the amount, benefit or entitlement is to be treated as 2 or more superannuation interests in accordance with 1 of the other arrangements in this Subdivision.
307-200.03 Meaning of superannuation interests - treating a superannuation interest as 2 or more superannuation interests (public sector schemes)
(1) For subsection 307-200 (1) of the Act, this regulation explains how to treat a superannuation interest in a public sector superannuation scheme as 2 or more superannuation interests.
(2) The interest is to be treated as 2 interests if:
(a) the superannuation benefit that is to be paid from the scheme is sourced:
(i) partly from contributions made into the scheme or earnings on those contributions; and
(ii) partly from 1 or more other sources; or
(b) the superannuation benefits that are to be paid from the scheme are sourced:
(i) partly from contributions made into the scheme or earnings on those contributions; and
(ii) partly from 1 or more other sources.
(3) For subregulation (2), the interests are:
(a) an interest that consists of the contributions made into the scheme and the earnings on those contributions; and
(b) an interest that consists of the remainder of the amount sourced from the other source or sources.
(4) In addition to the interests identified in accordance with paragraphs (3) (a) and (b), if:
(a) the superannuation provider offers an income stream; and
(b) the rules of the fund do not allow the transfer of amounts between different categories of lump-sum amounts and amounts that form part of, or can be used to purchase, a superannuation income stream; and
(c) the rules of the fund (as in effect on 5 September 2006) did not allow a specified amount held in the plan:
(i) to form part of that superannuation income stream; or
(ii) to be used for the purpose of purchasing a superannuation income stream offered by the provider;
the superannuation interest is also to be treated as the further interests described in subregulation (5).
(5) For subregulation (4), the following separate interests are created:
(a) the amount transferred or rolled into the plan from another plan is to be treated as 1 superannuation interest;
(b) each other amount to which subregulation (4) relates is to be treated as 1 superannuation interest to the extent to which the amount is subject to different requirements regarding the rules, terms or conditions relating to the way it can be cashed or paid as compared to the amounts mentioned in paragraphs (3) (a) and (b);
(c) if:
(i) paragraph (b) applies to more than 1 amount; and
(ii) each of those amounts is subject to different requirements regarding the rules, terms or conditions relating to the way it can be cashed or paid as compared to the amount mentioned in paragraph (a);
each of those amounts is to be treated as a separate superannuation interest.
307-200.04 Meaning of superannuation interests - treating a superannuation interest as 2 or more superannuation interests (constitutionally protected funds)
(1) For subsection 307-200 (1) of the Act, this regulation explains how to treat a superannuation interest in a constitutionally protected fund as 2 or more superannuation interests.
(2) An interest is to be treated as more than 1 interest if:
(a) the superannuation provider offers an income stream; and
(b) the rules of the fund do not allow the transfer of amounts between different categories of lump-sum amounts and amounts that form part of, or can be used to purchase, a superannuation income stream; and
(c) the rules of the fund (as in effect on 5 September 2006) did not allow a specified amount held in the plan:
(i) to form part of that superannuation income stream; or
(ii) to be used for the purpose of purchasing a superannuation income stream offered by the provider.
(3) For subregulation (2), the interest is to be treated as more than 1 interest as follows:
(a) the amount transferred or rolled into the plan from another plan is to be treated as 1 superannuation interest;
(b) each other amount to which subregulation (2) relates is to be treated as 1 superannuation interest to the extent to which the amount is subject to different requirements regarding the rules, terms or conditions relating to the way it can be cashed or paid as compared to the amount mentioned in paragraph (a);
(c) if:
(i) paragraph (b) applies to more than 1 amount; and
(ii) each of those amounts is subject to different requirements regarding the rules, terms or conditions relating to the way it can be cashed or paid as compared to the amount mentioned in subregulation (2);
each of those amounts is to be treated as a separate superannuation interest.
307-200.05 Meaning of superannuation interests - treating a superannuation interest as 2 or more superannuation interests (superannuation income streams)
If a superannuation income stream commences, an amount that supports the superannuation income stream is always to be treated as a separate superannuation interest.
307-205.01 Value of superannuation interest for calculating pre-July 1983 amount for members in the contributions and investment phase
(1) For paragraph 307-205 (a) of the Act, this regulation specifies methods for determining the value of a superannuation interest at a particular time for the purposes of calculating the pre-July 1983 amount of the crystallised segment of a tax-free component under section 307-225 of the Act.
Note Calculating the pre-July 1983 amount of the crystallised segment of the tax-free component will require the superannuation interest to be valued before 1 July 2007. This calculation will only be performed for a superannuation interest in the accumulation phase, and only for a superannuation interest in which part of the taxable component is comprised of an element taxed in the fund.
Defined benefit interest
(2) For a defined benefit interest, the method is as follows.
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Step 1 |
1 Calculate the value of the retirement benefit that would have been payable if the member: (a) had been eligible to retire immediately before 1 July 2007; and (b) had elected to do so. Note If a member is no longer in the employment which gave rise to the interest, but the interest is preserved in the scheme, retirement is taken to be the point at which the benefit is payable without penalty to the member. 2 If the retirement benefit depends upon the member’s age, service or salary, or upon the employer’s consent, the value is to be calculated on the assumption that: (a) the member’s service was his or her actual service immediately before 1 July 2007; and (b) the member’s age was the greater of: (i) the minimum age at which a retirement benefit could be taken without requiring the employer’s consent; and (ii) the member’s actual age immediately before 1 July 2007; and (c) the member’s salary was his or her salary for superannuation purposes immediately before 1 July 2007; and (d) the employer consents to the retirement. 3 If part or all of the retirement benefit can be paid as a superannuation income stream, then the value of that income stream is determined as the product of: (a) the annual rate of the superannuation income stream that would have been paid had the maximum proportion of the benefit possible been taken as an income stream; and (b) the applicable factor set out in clause 1 of Schedule 1B. The total value of the retirement benefit is the sum of the value of the superannuation income stream so determined and any lump sum that would have been payable under the assumptions described above had the member taken the maximum possible proportion of his or her benefit as an income stream. 4 If the superannuation benefit can only be paid as a lump sum then the value of the retirement benefit is the amount of that lump sum. |
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Step 2 |
If a superannuation lump sum benefit, including a roll-over superannuation benefit, would have been payable had the member resigned, or withdrawn his or her benefit, immediately before 1 July 2007, calculate the amount of that benefit. |
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Step 3 |
1 The value of the superannuation interest is the greater of the values worked out using steps 1 and 2. 2 If no value can be determined under step 2, the value of the superannuation interest is the value determined under step 1. |
Interest other than defined benefit interest
(3) For a superannuation interest that is not a defined benefit interest, the method is as follows.
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Step 1 |
Assume that the member was eligible to retire immediately before 1 July 2007, and work out the total amount of all the superannuation lump sums that could be payable from the interest at that time. |
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Step 2 |
If the total amount worked out under step 1 is less than the total amount actually or notionally allocated to the member (other than because of superannuation contributions surcharge liabilities, insurance costs or other fees, taxes and charges), the value of the interest is the amount actually or notionally allocated to the member. |
307-205.02 Value of superannuation interest
(1) For paragraph 307-205 (a) of the Act, this regulation:
(a) applies to a superannuation income stream (other than a superannuation income stream of a type prescribed by regulation 295-385.01); and
(b) specifies a method for determining the value of a superannuation interest at a particular time if the interest supports a superannuation income stream to which this regulation applies.
Note The proportioning rule requires the tax-free and taxable components of superannuation to be paid out as benefits in the same proportion as they make up of the underlying interest. A value of a superannuation interest is required to ensure that the proportioning rule operates appropriately.
(2) The value of the interest at a particular time is the sum of:
(a) the product of:
(i) the annual amount of the superannuation income stream payable in respect of the superannuation interest at that time; and
(ii) the applicable factor set out in clause 1 of Schedule 1B; and
(b) the product of:
(i) the nominal value of the superannuation lump sum, if any, which is payable in respect of the interest at a time in the future, other than a future lump sum which is a commutation of the income stream included in subparagraph (a) (i); and
(ii) the applicable factor set out in clause 2 of Schedule 1B.