Spotlight on SMSF pensions: The new ECPI rules & legacy pension conversion measure

Technical Summit 2021

Treasury released draft legislation to implement the Government’s two proposed measures from the 2019-20 budget with the goal to minimise the complexity of the current rules and reduce costs for SMSFs. A consultation period on the draft legislation is open until 18 June 2021. So, what’s the verdict – does the draft legislation achieve the goals or is there potential for additional complexity and administrative cost?

In this session there will be a focus on the draft legislation, including:

  • Which SMSFs will be eligible for ‘trustee choice’ for claiming ECPI;
  • How ‘trustee choice’ will work for SMSFs claiming ECPI;
  • A case study to illustrate how ‘trustee’ choice may affect an SMSF’s claim for ECPI, and;
  • Practice considerations to enable implementation of the new ECPI rules.

The session will also consider:

  • The implications of an SMSF not complying with the SIS pension standards, and;
  • Legacy pension conversion measure announced in this year’s Federal Budget.

At the end of the session, you will be able to:

  • Explain the new ECPI choice rules for an SMSF;
  • Identify which SMSFs will be eligible for trustee choice when claiming ECPI;
  • Compare the different methods for an SMSF claiming ECPI;
  • Assess the implications of an SMSF failing to meet the SIS pension standards, and;
  • Evaluate the options for dealing with a legacy pension within an SMSF.

The contents of this resource are taken to be correct at the time of publication.

Disclaimer: Technical Papers contain factual information only and are prepared without considering particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. The information contained in this document does not constitute advice given by the SMSF Association to you. If you rely on this information yourself or to provide advice to other persons, then you do so at your own risk. The SMSF Association is not licensed to provide financial product advice, legal advice or taxation advice. We recommend that you seek appropriate professional advice before relying upon the information in this technical paper. While the SMSF Association believes that the information provided is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this paper is not considered financial advice for the purposes of the Corporations Act 2001. © SMSF Association