Government's ‘in specie’ u-turn

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The Federal Government has abandoned its in specie transfer crack-down, but it has done so discretely.

Possibly one of the most significant SMSF recommendations arising from the Super System Review was that in specie transfers of listed securities be on-market only to remove the possibility of abuse as to the value and date of the transaction.

Townsends’ Michael Hallinan says, “The Government has backed away from proposing to regulate the acquisition and disposal of assets by SMSFs where the other party is a related party; consequently, the current position will continue.”

The Government simply removed the provisions, which were set out as Schedule 4 to the Tax and Superannuation Laws Amendment Bill 2013. The latest draft of the Bill no longer contains the Schedule.

Hallinan says there was sustained, intense lobbying against the provisions, and that it “wasn’t worth the pain” to put it through. But the discrete back-down reaffirms the lobbyists’ cause.

“Possibly they just can’t formulate a rational reasoned position as to why they’ve changed their mind after accepting the recommendation from the Cooper Review Committee.

“If the recommendation was meritorious in the first place – it was either meritorious or it wasn’t – and if it was meritorious in the first place then they should have stayed with it rather than just buckled.”

Abandoning the provisions shows a lack of principal in policy decision, says Hallinan, but it is good for the SMSF sector.