Legacy retirement product commutations and reserves
The Treasury Laws Amendment (Legacy Retirement Product Commutations and Reserves) Regulations 2024External Link amends the provisions for Legacy retirement pension commutations and allocations from reserves.
The Regulation changes relax restrictions on commuting specified legacy products. These can now be exited with the resulting capital used to commence another retirement phase interest, left in an accumulation interest account, or withdrawn from superannuation entirely.
The commutation must occur in full and be completed within a designated 5-year grace period beginning on 7 December 2024.
Reserves allocated to a member from a commuted or ceased legacy pension may need to be reported in the SMSF annual return in the year of allocation and will be exempt from contribution caps.
From 7 December 2024, with one exception, other reserve allocations that previously counted towards an individual's concessional cap will now count towards their non-concessional cap. Allocations made in lieu of an assessable contribution continue to count toward the concessional cap.
Housing tax incentives - build to rent developments
The housing tax incentives give owners and investors in large-scale eligible build to rent developments access to:
- an accelerated deduction of 4% for capital works relating to build to rent developments
- a concessional final withholding tax rate of 15% on eligible fund payments (amounts referrable to rental income and capital gains from the build to rent development).
To access the tax incentives:
- a build to rent development must meet all the eligibility criteria
- the owner must notify the Commissioner of Taxation (the Commissioner) of their choice for the development to be an active build to rent development in the approved form – build to rent development notice of events.
All eligibility conditions must be met for a minimum period of 15 years.
If the conditions aren't met while accessing the concessions, we may issue a Build to rent development misuse tax notice of assessment to the owner of the development. We will use this new tax to clawback the incentives during the relevant period. A deduction can't be claimed for misuse tax paid.
For more information, see Build to rent development tax incentives.
Reducing the use of cheques for tax refunds
The Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Act 2024External Link amends tax law to provide us with a discretionary power to retain certain tax refunds and credits for up to 90 days. We can retain the refund from the date the refund or credit becomes payable.
This period enables us time to contact you to nominate a valid Australian financial institution details to receive your refund by electronic fund transfer (EFT).
Where the Commissioner retains a refund, we will contact you by letter, email or a message in myGov.
The Commissioner can refund an amount to an account that satisfies the following conditions:
- the account holder is the
- entity
- entity and another entity
- entity’s registered tax agent or BAS agent
- entity’s legal practitioner as trustee or executor.
- the account is at a branch or office of a financial institution within Australia.
The holding period doesn't apply if an entity supplies their valid Australian financial institution details in their tax return. Where this happens, we will pay the refund to the account of an entity in a timely manner.
Continue to: How to lodge and pay your SMSF annual return
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