The broad rule is that trustees of self-managed funds must not acquire assets from related parties. Those related parties include:
The broad rule is in Section 66(1) of the SIS Act 
There are currently four notable exceptions to the broad rule. The exceptions allow the transaction:
These exceptions are in Section 66(2) of the SIS Act.
Also, the Tax Commissioner may create further exceptions.
The FLA allows superannuation interests to be allocated between parties to a marriage. This may occur through an agreement or by order of the Family Court.
If a marriage breaksdown, then a spouse wishing to transfer or roll over their superannuation interests to another fund for the benefit of their partner, must do so in the form of a cash payment. This ensures that the current related party transaction rules in the SIS Act are not breached.
The Tax Commissioner recognised that many small superannuation funds do not hold sufficient cash to make these "marriage breakdown" payments. In that light, the Tax Commissioner has created a new exception to the related party transaction rules in the SIS Act.
The new changes allow trustees of superannuation funds to transfer and acquire a spouses' interest in a superannuation fund without infringing the related party transaction rules of the SIS Act.
The transfer allowed by the new change must be made on the following conditions:
The exception is contained in the Tax Commissioner's determination dated 26 August 2006. You can read it there. Or for more information, you can call Julian Smith at Maddocks on 03 9288 0555.
Daniel is a lawyer in the Maddocks Tax & Revenue team.Daniel advises extensively in the following areas:
His advice covers both direct and indirect tax considerations.
Prior to joining Maddocks, Daniel worked at a Big Four Chartered Accounting Firm focusing on tax consulting for mergers and acquisitions.
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