Treasury Laws Amendment (2017 Measures No. 1) Regulations 2017 (F2017L00704)

Schedule 1   Innovative superannuation income streams

Income Tax Assessment Regulations 1997

5   At the end of Subdivision 307-D

Add:

307-205.02C Deferred superannuation income streams - value of an interest

(1) For the purposes of paragraph 307-205(1)(a) of the Act, the value at a particular time of an individual's superannuation interest that supports a deferred superannuation income stream referred to in subregulation (3) is the greater of:

(a) the sum of each amount of consideration paid for the interest for the income stream, and that amount's associated notional earnings, as worked out under subregulation (2) for the day that includes that time; and

(b) the total amount of the superannuation benefits that would become payable if the individual voluntarily caused the interest to cease at that time.

Note: For paragraph (a), subregulation (2) works out a total amount made up of the amount of consideration and its associated notional earnings.

(2) An amount of consideration paid for the interest for the income stream, and that amount's associated notional earnings, for a particular day (the valuing day ) is worked out by applying the following formula for each adjustment day (from the earliest to the latest):

where:

above threshold rate , for a particular day, means the rate determined for that day under subsection 1082(2) of the Social Security Act 1991.

adjustment day means each of the following:

(a) each 12-month anniversary of the consideration payment day that happens before the valuing day;

(b) the valuing day.

applicable above threshold rate , for a particular day, means:

(a) if that day is a 12-month anniversary of the consideration payment day - the above threshold rate for that day; or

(b) if that day is the valuing day - the proportion of the above threshold rate for that day equal to the number of days that the valuing day is in the 12 months starting on the day after:

(i) if the valuing day is at least 12 months after the consideration payment day - the most recent 12-month anniversary of the consideration payment day; or

(ii) otherwise - the consideration payment day.

compounded amount of consideration just before the adjustment day means:

(a) for the earliest adjustment day - the amount of consideration; or

(b) for each later adjustment day - the result of applying the formula for the most recent earlier adjustment day.

consideration payment day means the day the amount of consideration was paid.

(3) Subregulation (1) applies to a deferred superannuation income stream that:

(a) is covered by paragraph (c) of the definition of superannuation income stream in subregulation 995-1.01(1); and

(b) is neither a pooled investment pension nor a pooled investment annuity.

307-205.02D Pooled investment pensions - value of an interest

(1) For the purposes of paragraph 307-205(1)(a) of the Act, the value at a particular time of an individual's superannuation interest that supports a pooled investment pension is the value of so much of the collective pool of assets in the fund at that time as is:

(a) attributed to the individual under the rules of the fund; and

(b) specified in an actuary's certificate.

(2) A pooled investment pension is a superannuation income stream supported by an individual's superannuation interest if:

(a) the interest is in a superannuation fund; and

(b) the rules for the provision of the income stream ensure that, once payments of the income stream start, the income stream is to continue for the remainder of the individual's life; and

(c) the rules for the provision of the income stream ensure that the amounts of those payments are determined by having regard to:

(i) the age, life expectancy or other factors relevant to the mortality of each individual who has that kind of superannuation interest in the fund; and

(ii) the pool of assets in the fund held for the collective benefit of those individuals.

307-205.02E Pooled investment annuities - value of an interest

(1) For the purposes of paragraph 307-205(1)(a) of the Act, the value at a particular time of an individual's superannuation interest that supports a pooled investment annuity is the value of so much of the collective pool of assets held by the life insurance company at that time as is:

(a) attributed to the individual under the contract for the provision of the pooled investment annuity; and

(b) specified in an actuary's certificate.

(2) A pooled investment annuity is a superannuation income stream supported by an individual's superannuation interest if:

(a) the superannuation income stream is a superannuation annuity provided by a life insurance company; and

(b) the contract for the provision of the income stream ensures that, once payments of the income stream start, the income stream is to continue for the remainder of the individual's life; and

(c) the contract for the provision of the income stream ensures that the amounts of those payments are determined by having regard to:

(i) the age, life expectancy or other factors relevant to the mortality of each individual who has that kind of superannuation interest with the life insurance company; and

(ii) the pool of assets held by the life insurance company for the collective benefit of those individuals; and

(d) at least 50 entities have superannuation interests (of any kind) with the life insurance company.