29 June 2015
Media Release - #2015035, 2015

Income tax relief for MySuper transfers within a fund

The Government will amend the income tax law to ensure that the existing MySuper tax relief covers the consequences of transfers within a super fund, where the transfer is required under the law.

Super funds are required to transfer the existing balances of super fund members who are in default products to a MySuper product by 1 July 2017. MySuper products provide a simple, cost effective default superannuation product.

Tax relief is currently provided for these transfers into a different super fund, but not for transfers within the same fund structure. As a result, default members of some super funds may incur adverse and unintended consequences when their account balances are transferred.

From today, super funds that transfer their default members’ balances to a MySuper product within their fund structure will also be able to access this tax relief.

Super fund members will benefit from the extension of the MySuper tax relief.

This change ensures the policy intent of the MySuper reforms is delivered and that the retirement savings of members are not diminished when their balances are transferred.

This measure has been developed in consultation with industry.

Scope of the relief

  • A complying super fund that mandatorily transfers the account balances of its default members to a MySuper compliant product offered by the fund will be able to defer the income tax consequences for assets transferred as a result of mandatory transfers of member balances within the same super fund. By applying an asset roll-over, a liability will not arise until the asset is ultimately disposed by the transferee entity.
  • To access this relief the relevant MySuper product will need to be offered through the same type of structure as the default product.
  • Where the super fund invests in a life insurance company or a pooled superannuation trust to support its default members, the same relief will apply.
  • This asset roll-over will apply at the membership interest level and to the interposed entities that dispose of assets pursuant to the transfer.
  • This roll-over will apply to the initial transfer of members’ account balances from default products to MySuper products, and will not extend to any rebalancing which may occur after the initial transfer.
  • The relief will not extend to the transfer of losses.
  • Self-managed super funds will be excluded from the relief because the MySuper requirements do not apply to them.