The ATO have provided important updated guidance for recipients of Market-Linked Pensions (MLP) as a result of an unintended consequence in the legislation that provides a nil value on commutation of the capped defined benefit income stream.
In some instances, members have commuted the MLP within a SMSF post 1 July 2017 for transfer balance cap (TBC) purposes to re-purchase the pension using the purchase price of the income stream (reducing the value on the member’s TBC).
Treasury will amend the law to fix this issue and the ATO will not apply compliance resources to target the double-counting on such pensions.
For more information, see the ATO news alert, https://www.ato.gov.au/…/3–advice-for-funds-where-members…/
Author: Aaron Dunn
Financial services professionals rely on Aaron for expertise on SMSF and the growth of the sector. Aaron’s insights into technical issues and the SMSF industry means he is regularly asked to participate in government and regulatory reviews, including the Super System Review and the Reinventing the ATO program.
Aaron is a Certified Practising Accountant (CPA) and SMSF Specialist Advisor (SSA), having worked within the SMSF sector for more than 20 years. He is the CEO & Co-founder of Smarter SMSF (formerly The SMSF Academy).
Aaron is a family man who loves his sport, in particular AFL football (Essendon) and athletics, where he was previously a nationally ranked high jumper having jumped a personal best of 2.14m.
