Optional CGT loss roll over for complying super funds
On 23 December 2008, the former Minister for Superannuation and Corporate Law announced that, with effect from 24 December 2008, the government will provide an optional capital gains tax (CGT) roll over for capital losses arising from CGT events happening under a complying superannuation fund’s merger with an Australian Prudential Regulation Authority (APRA) regulated superannuation fund with at least five members before 1 July 2010.
The roll over will preserve the value of these capital losses in the receiving super fund, allowing them to be offset against future capital gains.
On 29 April 2009, the former Minister for Superannuation and Corporate Law made an announcement to extend availability of this measure to 30 June 2011 and to extend the application of the roll over as follows:
- the scope of the measure will be expanded to apply to mergers involving pooled superannuation trusts (PSTs) where the continuing entity has at least five members and to mergers involving the complying superannuation business of life insurance companies
- to reduce compliance costs, the measure will now permit superannuation entities in a net capital loss position to roll over assets with both capital gains and capital losses realised on transfer under the merger, rather than just capital losses. Entities can still transfer losses on an asset-by-asset basis as originally announced
- the roll-over will be expanded to permit previously realised net capital losses held in the transferring superannuation entity to be transferred to the continuing superannuation entity and the roll over or transfer of any revenue losses to the continuing entity. This further reduces impediments to mergers by ensuring that the tax value of previously realised capital losses and revenue losses is not lost when the transferring superannuation fund is wound up.
