• T Assessable income due to changed tax status of fund

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    Show at T the amount that is to be included in the fund’s assessable income as a result of a change in tax status of the fund.

    A fund that changes from complying to non-complying, or a fund that changes from being a foreign fund to an Australian superannuation fund, must calculate the amount of ordinary income and statutory income from previous years using the appropriate formula below. The amount calculated is included at T in the income year that the status of the fund changed.

    A change in compliance or residency status for a fund may result in changes in tax rates which apply to the taxable income of the fund.

    The fund became a non-complying fund during the year

    If during the income year the fund changed from being a complying superannuation fund to a non-complying superannuation fund, the fund’s assessable income for that income year includes its ordinary income and its statutory income from previous years, as calculated using formula A below.

    In effect, the fund loses the benefit of tax concessions that it obtained as a complying superannuation fund.

    Formula A

    Asset value – non-concessional contributions = assessable amount

    where:

    • asset value is the total of the market values of the fund’s assets immediately before the start of the income year in which the fund became non-complying, and
    • non-concessional contributions (formerly referred to as ‘undeducted contributions’) is the total of
      • the part of the crystallised undeducted contributions that relate to the period after 30 June 1983, and
      • the contributions segment for current members at the time that have not been, and cannot be, deducted.
       

    Show at the amount calculated using formula A.

    The fund was, but no longer is, a foreign fund

    If a fund was a foreign superannuation fund and became an Australian superannuation fund during the income year, its assessable income for that income year includes the amount calculated using formula B below:

    Formula B

    Asset value – member contributions = assessable amount

    where:

    • asset value is the total of the market values of the fund’s assets immediately before the start of the income year in which the fund became an Australian superannuation fund, and
    • member contributions is the amount in the fund at that time representing contributions made by current members.

    Show at the amount calculated using formula B.

    The fund is not entitled to a tax offset (at C1 Foreign income tax offset item 12) for foreign income tax paid before the start of the income year with respect to income reported at T as a result of the change in the tax status of the fund.

    Last modified: 21 Aug 2015QC 44343