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Income Tax Assessment (1997 Act) Regulations 2021

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 295 - Taxation of superannuation entities  

Subdivision 295-D - Contributions excluded  

SECTION 295-265.02   METHOD 1 - FUNDING CREDIT VALUATION PROCESS  

295-265.02(1)    
The following is method 1 for the purposes of section 295-265.01 . Method statement


Step 1:

For an income year for which a superannuation provider chooses to reduce the amount of contributions that would otherwise be included in a superannuation fund ' s assessable income, calculate, in accordance with section 295-265.03 , the discounted present value of liabilities as at the start of that income year that relates to membership completed.

The discounted present value of liabilities for all members apportioned to pre-1 July 88 membership is the value of pre-1 July 88 liabilities for the income year.


Step 2:

Calculate, in accordance with section 295-265.04 , the total amount of superannuation fund assets at their market value at the start of the income year, on the basis on which the superannuation provider ' s actuary would consider appropriate for a valuation under Part 9 of the SIS Regulations.

The result is the assets available to fund pre-1 July 88 liabilities for the income year.


Step 3:

Deduct the assets available to fund pre-1 July 88 liabilities for the income year from the value of pre-1 July 88 liabilities for the income year.

The result is the value of unfunded pre-1 July 88 liabilities for the income year.


Step 4:

The amount of taxable contributions that are allocated to fund that value of unfunded pre-1 July 88 liabilities, as notified by the superannuation provider to the actuary, are the pre-1 July 88 taxable contributions for the income year.


295-265.02(2)    
The superannuation provider ' s actuary must retain the following documentation for the income year for not less than 5 years:

(a)    documentation of the liability and valuation apportionment calculations for step 1 of method 1;

(b)    documentation to support calculations made for the asset apportionment for step 2 of method 1.

295-265.02(3)    
The superannuation provider must retain documentation to support calculations of pre-1 July 88 taxable contributions for the income year for not less than 5 years.


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