INCOME TAX ASSESSMENT REGULATIONS 1997

PART 3 - SUPERANNUATION BENEFITS PAID FROM COMPLYING PLANS ETC  

Division 307 - Key concepts relating to superannuation benefits  

Subdivision 307-D - Superannuation interests  

REGULATION 307-205.01   VALUE OF SUPERANNUATION INTEREST FOR CALCULATING PRE-JULY 1983 AMOUNT FOR MEMBERS IN THE CONTRIBUTIONS AND INVESTMENT PHASE  

307-205.01(1)  


For paragraph 307-205(1)(a) of the Act, this regulation specifies methods for determining the value of a superannuation interest at a particular time for the purposes of calculating the pre-July 1983 amount of the crystallised segment of a tax-free component under section 307-225 of the Act.
Note:

Calculating the pre-July 1983 amount of the crystallised segment of the tax-free component will require the superannuation interest to be valued before 1 July 2007. This calculation will only be performed for a superannuation interest in the accumulation phase, and only for a superannuation interest in which part of the taxable component is comprised of an element taxed in the fund.

Defined benefit interest

307-205.01(2)  
For a defined benefit interest, the method is as follows.


Step 1 1   Calculate the value of the retirement benefit that would have been payable if the member:
(a) had been eligible to retire immediately before 1 July 2007; and
(b) had elected to do so.
Note If a member is no longer in the employment which gave rise to the interest, but the interest is preserved in the scheme, retirement is taken to be the point at which the benefit is payable without penalty to the member.
2   If the retirement benefit depends upon the member ' s age, service or salary, or upon the employer's consent, the value is to be calculated on the assumption that:
(a) the member ' s service was his or her actual service immediately before 1 July 2007; and
(b) the member ' s age was the greater of:
(i) the minimum age at which a retirement benefit could be taken without requiring the employer ' s consent; and
(ii) the member ' s actual age immediately before 1 July 2007; and
(c) the member ' s salary was his or her salary for superannuation purposes immediately before 1 July 2007; and
(d) the employer consents to the retirement.
3   If part or all of the retirement benefit can be paid as a superannuation income stream, then the value of that income stream is determined as the product of:
(a) the annual rate of the superannuation income stream that would have been paid had the maximum proportion of the benefit possible been taken as an income stream; and
(b) the applicable factor set out in clause 1 of Schedule 1B.
The total value of the retirement benefit is the sum of the value of the superannuation income stream so determined and any lump sum that would have been payable under the assumptions described above had the member taken the maximum possible proportion of his or her benefit as an income stream.
4   If the superannuation benefit can only be paid as a lump sum then the value of the retirement benefit is the amount of that lump sum.
Step 2 If a superannuation lump sum benefit, including a roll-over superannuation benefit, would have been payable had the member resigned, or withdrawn his or her benefit, immediately before 1 July 2007, calculate the amount of that benefit.
Step 3 1   The value of the superannuation interest is the greater of the values worked out using steps 1 and 2.
2   If no value can be determined under step 2, the value of the superannuation interest is the value determined under step 1.

Interest other than defined benefit interest

307-205.01(3)  
For a superannuation interest that is not a defined benefit interest, the method is as follows.


Step 1 Assume that the member was eligible to retire immediately before 1 July 2007, and work out the total amount of all the superannuation lump sums that could be payable from the interest at that time.
Step 2 If the total amount worked out under step 1 is less than the total amount actually or notionally allocated to the member (other than because of superannuation contributions surcharge liabilities, insurance costs or other fees, taxes and charges), the value of the interest is the amount actually or notionally allocated to the member.




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