Due to limited parliamentary sittings in 2020 as a result of Covid-19, the Assistant Treasurer has announced that exempt current pension income changes will have a revised start date of 01/07/2021 i.e. a year later than expected.
Before 01/07/2017 industry practice was to use an unsegregated approach for ECPI actuarial certificates if at any time during the year there was an accumulation balance in addition to ABP. The ATO’s view from that date was segregation applies for parts of financial years if during any period the assets were backing solely retirement phase income streams. Deemed segregation pushes up complexity and administration costs by requiring multiple sets of accounts.
The legislation intent is to reduce this red tape to the previous approach. The fund will be able to choose the ECPI method to apply for a full financial year. Until this legislation is operational, the issue can be avoided by leaving $10 in accumulation stage at all times.
An amendment is also required to amend the disregarded small fund asset rules needing an actuarial certificate where a 100% tax exemption applies.
NetActuary also reduces red tape in certificate requests without losing the value of human review and judgement. The majority of our certificate requests arrive with no filled in data-form. Simply a draft financial statement, operating statement, general ledger and trustee details provides all that is needed.
The cost of an ECPI actuarial certificate is a modest $77 inclusive of GST.
Please don’t hesitate to ‘phone Brian on (03) 9028 5002 if you would like to discuss any SMSF matter.