Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today announced that the optional capital gains tax (CGT) roll-over for capital losses for mergers of complying superannuation funds with APRA-regulated superannuation funds with at least five members will be expanded following consultation with industry.
"Following consideration of issues raised in the industry consultation, the Government has decided to make changes to the detail of the super funds roll-over announced in December last year to provide better support for mergers of super funds."
"The December announced roll-over, which applied from 24 December 2008, removes certain impediments to super fund mergers and these additional changes will remove certain other impediments which have been identified through the consultation."
"The Government will extend the period of application of the roll-over by one year to 30 June 2011, allowing super funds wanting to use the roll‑over more time to do so," Minister Sherry said.
The details of the expansion are as follows:
- the scope of the measure will be expanded to apply to mergers involving pooled superannuation trusts (PSTs) where the continuing entity has at least five members and to mergers involving the complying superannuation business of life insurance companies;
- to reduce compliance costs, the measure will now permit superannuation entities in a net capital loss position to roll over assets with both capital gains and capital losses realised on transfer under the merger, rather than just capital losses. Entities can still transfer losses on an asset-by-asset basis as originally announced; and
- the roll‑over will be expanded to permit previously realised net capital losses held in the transferring superannuation entity to be transferred to the continuing superannuation entity and the roll‑over or transfer of any revenue losses to the continuing entity. This further reduces impediments to mergers by ensuring that the taxation value of previously realised capital losses and revenue losses is not lost when the transferring superannuation entity is wound up.
Treasury will release the draft legislation for consultation on the website (www.treasury.gov.au) shortly.