Transitional capital gains tax relief for super funds

To support super funds to comply with changes to the super system that start on 1 July 2017, the government has introduced transitional capital gains tax (CGT) relief for affected funds.

Transitional CGT relief is available to super funds for certain CGT assets that will lose the tax exemption:

• by complying with the new transfer balance cap
• as a result of transition-to-retirement income stream (TRIS) reforms commencing.

CGT relief must be chosen by a trustee for a CGT asset. The asset must have been held by the fund throughout the period 9 November 2016 to midnight 30 June 2017.

There are two new questions in the CGT schedule for transitional CGT relief. It applies to certain CGT assets held by a complying SMSF at all times between the start of 9 November 2016, to ‘just before’ 1 July 2017.

If CGT relief is chosen, the trustee must advise us in the 2017 CGT schedule:

• that they have chosen for the CGT relief to apply at question 8F
• any capital gain deferred to a later year at question 8G

A fund must report the above on, or before, the day they are required to lodge their fund’s 2017 tax return. This decision is irrevocable.