Exempt current pension income (ECPI) changes first put forward two years ago moved a step closer to becoming reality with the federal government releasing exposure draft legislation covering this issue.
The amendments, initially proposed in the 2019 federal budget, will allow a trustee to use their preferred method of calculating ECPI where their SMSF is fully in the retirement phase for part of the income year, but not for the entire income year.
The draft legislation also removes a requirement for superannuation funds to obtain an actuarial certificate when calculating ECPI where the fund is fully in the retirement phase for all of the income year.
In releasing the exposure draft legislation, Superannuation, Financial Services and the Digital Economy Minister Jane Hume said “these reforms will reduce costs and simplify reporting for affected superannuation funds”.
The exposure draft legislation, and explanatory material, are available on the Treasury website and the closing date for feedback is 18 June.
No date has been given for the commencement of the changes, which still need to enter and pass through parliament.
The draft, however, states it will apply on the first 1 January, 1 April, 1 July or 1 October after the day the legislation receives royal assent and the amendments to the Income Tax Assessment Act 1997 will apply to the 2022 income year and later income years.''