Division 296 tax defined benefit regulations released

Our April Super Update provides a comprehensive summary of the long-awaited draft defined benefit regulations for Division 296 tax. We explore a Treasury consultation on enhancing the performance test, proposed updates to Family Law (Superannuation) regulations, and draft amendments to APRA’s prudential standard SPS 114 and guidance on the ORFR. Here is what you need to know:

Highlights:

Division 296 tax draft defined benefit regulations released:

• The long-awaited draft regulations setting out the valuation of defined benefit interests for Division 296 tax have been released for consultation. This summary of the draft regulations offers three methods for valuing the diverse range of defined benefit interests.
• We welcome the flexibility contained in the draft regulations.

Treasury Consultation on options to improve the Performance Test:

• A Treasury consultation has recently closed to canvass a range of options for improving the performance test.
• The paper summarised the concerns identified by stakeholders in response to Treasury’s review of the YFYS reforms in 2022 and listed four key principles that would be used when assessing potential changes to the test.

Replacement Family Law (Superannuation) regulations:

• Updated draft Family Law (Superannuation) regulations have been released for consultation as the existing regulations are due to sunset on 1 April 2025.
• The new regulations will include updated standard valuation methods and assumptions that will enable valuation of a wider range of superannuation interests and benefits.

Draft amendments to SPS 114 AND SPG 114 released:

• APRA has released draft amendments to SPS114 ORFR and the supporting guidance in SPS 114 for consultation.

News in brief

Our news in brief section includes a summary of:

• The superannuation thresholds for 2024-25, which have been released.
• Draft regulations to fix transfer balance cap issues for defined benefit pensioners on SFTs.
• New regulatory materials for the extension of the Financial Accountability Regime to superannuation.
• Super on paid parental leave announcement.
• APRA publication of fund expenses data.
• The latest superannuation statistical publications.

Legislative Update

• As usual, our legislative update provides the latest changes in the superannuation landscape and a guide to the key changes to superannuation and their effective dates.

For an in-depth understanding, stay informed and help your members navigate their retirement journey with confidence, download our comprehensive Update prepared by our specialists.