Issued by authority of the Minister for Revenue
and Assistant Treasurer

Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991

Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991

Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2007 (No. 1)

The Tax Laws Amendment (Simplified Superannuation) Act 2007 and related Acts give effect to the Simplified Superannuation reforms announced in the Government’s 5 September 2006 statement, A Plan to Simplify and Streamline Superannuation – Outcomes of Consultation. These reforms make superannuation easier to understand, improve incentives to work and save, and provide greater flexibility over how superannuation savings can be drawn down in retirement.

The initiatives include improving the regulation of self managed superannuation funds.

Subsection 7(1) of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991 (Levy Act) provides that the Governor‑General may make regulations for the purposes of section 6 of the Levy Act.

Section 6 of the Levy Act provides that regulations specify a supervisory levy for self managed superannuation funds and a late lodgment amount.

The Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991, specify a $45 per annum supervisory levy for self managed superannuation funds. These Principal Regulations also specify an additional levy amount of $10 per month for the late lodgment of a fund’s annual regulatory return.

The purpose of the Regulations is to amend the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991 to increase the amount of the annual supervisory levy to $150 and also remove the late lodgment amount.

Details of the Regulations are set out in the Attachment A.

The Levy Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations commence on 1 July 2007.

The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.

The draft Regulations were made available on the Simpler Super website for public consultation.

ATTACHMENT A

Details of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2007 (No. 1)

Regulation 1 specifies the name of the Regulations as the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulations 2007 (No. 1).

Regulation 2 provides that the Regulations commence on 1 July 2007.

Regulation 3 provides that Schedule 1 amends the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991 (Levy Imposition Regulations).

Regulation 4 provides that the amendment made by the Regulations apply for the 2007-08 year of income and each subsequent income year.

Schedule 1 – Amendment relating to self managed superannuation funds

Regulation 4 of the Levy Imposition Regulations currently specifies an amount of $45 for the annual supervisory levy for self managed superannuation funds (SMSF). Regulation 4 also specifies an amount of $10 per month for the late lodgement of the fund’s annual regulatory return.

The new Regulations amend the amount of the annual supervisory levy to $150 and also remove the late lodgment amount.

Supervisory levy

All superannuation funds are subject to a supervisory levy designed to fund the regulatory costs of ensuring funds comply with superannuation legislation. Separate levy arrangements apply to SMSFs and to registrable superannuation entities to recover the costs of their regulation by the Australian Taxation Office and by the Australian Prudential Regulation Authority respectively.

The new Regulations are consistent with the Government’s approach that the regulation of SMSFs should be broadly on a cost-recovery basis. That is, that the money collected from the supervisory levy should broadly cover the reasonable costs of the Commissioner of Taxation (as regulator) in regulating SMSFs. The current $45 levy has not increased since 1999, and no longer covers the Commissioner of Taxation’s costs.

The levy arrangements are in accordance with the Australian Government Cost Recovery Guidelines.

Item 1 amends the amount of the levy to $150. The Regulations refer to section 6 of the Levy Act, recently amended as part of the Government’s Simplified Superannuation reforms, instead of the former subsection 6(1) of the Levy Act.

The amount of $150 for the annual SMSF levy applies for the 2007-08 year of income and later years.

Late lodgment amount

The removal of the late lodgment amount of $10 is a consequence of amendments to the Levy Act. As part of the Government’s Simplified Superannuation reforms, the penalty for the late lodgment of an SMSF’s regulatory return will be imposed under the Taxation Administration Act 1953, consistent with the penalties for the late lodgement of other forms required under the income tax laws.

Item 1 removes the $10 late lodgement amount by omitting subregulations 4(1A) and 4(2).