The Government has announced an extension to the CGT marriage breakdown roll-over for small superannuation funds.
The Government will introduce legislation to allow one spouse in a marriage breakdown to transfer their entire in specie interest in a small superannuation fund (a complying superannuation fund with four or fewer members) to another complying superannuation fund, without there being an immediate CGT taxing point.
Currently the CGT roll-over for assets of small superannuation funds on marriage breakdown applies only to the spouse who benefits from a payment split made under the Family Law Act 1975 and only to the assets subject to the payment split. These assets can only be rolled over to another small superannuation fund.
The current roll-over does not recognise that the spouse who benefits from the payment split may have made their own personal contributions to the fund. The amendments will allow all the in specie interests of the departing spouse to be transferred to a new complying superannuation fund without there being an immediate CGT taxing point.
The amendment recognises that it is often in the interests of spouses in a marriage breakdown not to continue to provide for their future superannuation arrangements through a single small superannuation fund. The amendment will also provide greater choice of fund to the spouse whose interest is transferred.
The amendment will have effect from 1 July 2007.