Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 295 - Taxation of superannuation entities  

Subdivision 295-F - Exempt income  

SECTION 295-385   Income from assets set aside to meet current pension liabilities  

295-385(1)    
The *ordinary income and *statutory income of a *complying superannuation fund for an income year is exempt from income tax to the extent that:

(a)    it would otherwise be assessable income; and

(b)    it is from *segregated current pension assets.

Exception

295-385(2)    
Subsection (1) does not apply to:

(a)    *non-arm ' s length income; or

(b)    amounts included in assessable income under Subdivision 295-C .

Meaning of segregated current pension assets

295-385(3)    
Assets of a *complying superannuation fund are segregated current pension assets at a time if:

(a)    

the assets are invested, held in reserve or otherwise dealt with at that time solely to enable the fund to discharge all or part of its liabilities (contingent or not) in respect of *RP superannuation income stream benefits of the fund at that time; and

(b)    the trustee of the fund obtains an *actuary ' s certificate before the date for lodgment of the fund ' s *income tax return for the income year to the effect that the assets and the earnings that the actuary expects will be made from them would provide the amount required to discharge in full those liabilities, or that part of those liabilities, as they fall due.

295-385(4)    
Assets of a *complying superannuation fund are also segregated current pension assets of the fund at a time if the assets are invested, held in reserve or otherwise being dealt with at that time for the sole purpose of enabling the fund to discharge all or part of its liabilities (contingent or not), as they become due, in respect of *superannuation income stream benefits:

(a)    

that are *RP superannuation income stream benefits of the fund at that time; and

(b)    prescribed by the regulations for the purposes of this section.

295-385(5)    

Subsection (4) does not apply unless, at all times during the income year, the liabilities of the fund (contingent or not) to pay *RP superannuation income stream benefits of the fund were liabilities in respect of superannuation income stream benefits that are prescribed by the regulations for the purposes of this section.

295-385(6)    

However, assets of a *complying superannuation fund that are supporting a *superannuation income stream benefit that is prescribed by the regulations for the purposes of this section are not segregated current pension assets to the extent that the *market value of the assets exceeds the account balance supporting the benefit.

295-385(7)    

Also, *disregarded small fund assets are not segregated current pension assets.

Meaning of segregated current pension assets - trustee choice

295-385(8)    

Despite subsections (3) to (6) , none of the assets of a *complying superannuation fund are segregated current pension assets of the fund at any time in an income year if the trustee of the fund chooses under subsection (9) to treat all of the assets as not being segregated current pension assets for the year.

295-385(9)    

The trustee of a *complying superannuation fund may choose to treat all of the assets of the fund as not being *segregated current pension assets of the fund for an income year if, at one or more times in the year, all *superannuation interests in the fund are in the *retirement phase.

295-385(10)    

Subsections (8) and (9) do not apply if:

(a)    at all times in the year, all *superannuation interests in the fund are in the *retirement phase; or

(b)    the assets of the fund are *disregarded small fund assets at all times in the year.