Several amendments were made to the Superannuation Industry Supervision (SIS) Act in November last year one of which has changed the rules governing in specie asset acquisitions by super funds.
"The change is quite simple and has been made to permit a super fund to acquire an asset in specie from a related trust following the breakdown of a marriage or relationship," Townsends Business and Corporate Lawyers special counsel Michael Hallinan said.
The legal amendments were contained in the Superannuation Legislation Amendment Act, 2010 that was give royal ascent on 16 November 2010.
For the new rules to apply several conditions have to be met.
"The transferor and transferee must be the respective trustees of the respective super funds or their respective managers," Hallinan explained.
"The asset must be acquired for the benefit of a particular member and at the time of acquisition of the asset the member and the spouse must be separated,' he said.
The other two conditions that need to exist for the amendment to be valid are the asset acquisition must be the result of the relationship breakdown and under the splitting arrangement the assets represent the whole or part of the member's entitlements.
Further concessions apply in regard to capital gains tax (CGT) and the in-house asset rule with these transactions.
"Obviously we do have the benefit of the CGT rollover in relation to a marriage breakdown in these situations," Hallinan said.
In reference to in-house assets there is relief in s71EA of the Superannuation Legislation Amendment Act whereby the transferred asset in question is deemed to have been purchased by the receiving fund at the time it was acquired by the transferring fund.
In addition the same transaction history applies to the asset in the receiving fund.
