It is the government’s policy to encourage the consolidation of large superannuation funds through mergers. However, this policy objective has not been assisted by the number of “road blocks” in the tax system that increase costs and make it more difficult for fund trustees to determine that mergers are in the best interests of their members. Although, there has recently been some relief via the ability to transfer losses and rollover capital assets, there are still many tax and duty issues that must be considered for a merger.
This presentation examines some of those issues, including:
- in what circumstances, and for what structures, does the loss transfer and CGT asset rollover rules apply
- tax consequences for the transfer of non-capital assets
- issues arising out of the use of pooled superannuation trusts in mergers
- what should be done if one fund values its assets on an after-tax basis and the other values it on a before-tax basis
- issues arising out of deferred tax assets
- no-TFN contribution issues
- the “crystallisation” of members, benefits upon merger issue
- the deductibility of merger costs for the transferee fund
- GST implications for a merger.