Guideline on the changes to taxation of TRIS updated

The ATO has updated its guideline on the implementation of the changes to the taxation of transition to retirement income streams (TRIS), to reflect various recent legislative amendments.

Practical Compliance Guideline PCG 2017/3 contains the ATO’s compliance approach for certain APRA-regulated superannuation funds, pooled superannuation trusts and life insurance companies facing practical difficulties in complying with legislative amendments that took effect from 1 July 2017 affecting TRIS during the transition period. The changes meant that from 1 July 2017, the earnings tax exemption provisions only applied for a superannuation income stream in the retirement phase.

Among other things, the guideline has been updated to include references to “a non-retirement phase TRIS” and clarifies that a TRIS will not be in the retirement phase unless a superannuation income stream benefit is currently payable from it and the recipient:

• is 65 years old or older
• has met a relevant condition of release with a nil cashing restriction (retirement, terminal medical condition, permanent incapacity) and they have notified the superannuation provider for the TRIS of that fact
• is in receipt of the TRIS as a reversionary beneficiary.