The change in approach is a great result for SMSF practitioners and their clients and follows industry consultation on the issue.
As we noted in our blog back in May 2015, the ATO raised concerns in a number of outlets earlier this year about how SMSFs were claiming ECPI. They also updated the technical guidance on their website highlighting two key points where they felt trustees were getting it wrong:
Both of these points differ from Accurium’s interpretation of the legislation as well as long standing accepted practice in the SMSF industry. We also received an influx of queries from clients concerned about how to apply the new guidance. In light of this, Accurium made representations to the ATO to support the approach currently being used.
Following a consultation process with a number of key actuaries in the SMSF industry (including Accurium’s Doug McBirnie), the ATO have now accepted that the industry view on these issues does not contravene the legislation.
The ATO have revised their technical guidance on ECPI again and will soon update their website to reflect this change. Importantly, they have confirmed that:
This is a good outcome. The ATO have removed the confusion around their earlier statements and confirmed that they are happy with standard industry practice. It also reduces red tape by removing the need for an actuarial certificate where it does not provide a benefit to the trustees.
Should you have any questions over when an actuarial certificate is required, or which method to use to claim ECPI, please contact our SMSF Services team and they will be happy to help.
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