CGT Relief - Latest News

The purpose of the CGT relief provisions is to provide SMSF’s temporary relief from some capital gains that can arise simply by complying with the transfer balance cap, or the TRIS reforms. It allows trustees of SMSF’s to reset an asset’s cost base to its market value prior to the 1st July 2017.

Advisors are also encouraged to review SMSF’s that were in pension made during the 2017 financial year, especially self managed funds worth more than $1.6 million in super, but keep in mind, some funds with member balances below $1.6 million may also be entitled to CGT relief.

The CGT relief may work in favour of some of your trustees, however for others, it may not. Proper analysis is required to make the right determination.

Important factors to remember:

  • CGT relief is applicable on an asset by asset basis and only applies to assets held in the fund beforethe 1st July 2017.
  • The CGT relief only applies to an asset that is held by the SMSF on 9 November 2016
  • The CGT benefits some SMSF’s and not others so should be assessed on a case by case basis

According to the Tax Law Amendment (2012 Measures No.1) Act 2012, exceptions to what constitute CGT assets to an SMSF include:

  • “SMSF’s owning real estate, a share, unit or a stapled security as trading stock as at 7:30 pm ACT time on 10 May 2011
  • the asset is a debenture stock, a bond, debenture, certificate of entitlement, bill of exchange, promissory note or other security, deposit with a bank, building society or other financial institution, a loan or some other contract under which an entity is liable to pay an amount.” (s 295‑85(3)(b) of the ITAA 1997).

In summary, advisors must ensure they stay up to date on the current legislation to ensure they are continuously providing quality CGT relief advice to their clients.

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