Super, proposals changed

Press, 13 October 1982, Page 11

Super, proposals changed

The Government has backed away from the full rigor of its Budget proposals to tax certain lump sum superannuation schemes. A clause modifying the original proposal that all lump sum superannuation schemes would be subject to tax is contained in the Income Tax Amendment (No. 2) Bill. The Minister in Charge of the Inland Revenue Department, Mr Falloon, said those schemes which would be taxable in the future fell into two classes.

First, schemes which the Government Actuary had not approved or for which he had drawn a previous approval would be taxable. They were the non-institu-tional personal schemes which were being entered into for tax avoidance, he said. They were to be taxed on their investment income at 45 cents in the dollar, which was the rate applying to companies. Second, lump sum superannuation schemes would be taxed. Mr Falloon said. However, the income lia-

ble to assessment was the investment income arising from contributions of members joining after Budget night, and the investment income derived from the increased level of contributions of existing members. The assessable income of such schemes would be taxed at 31 cents in the dollar, he said. Assessable income in both classes of taxable schemes would comprise the net investment income, including dividends and profits derived less losses incurred on sale of investments.