EXPLANATORY STATEMENT

Select Legislative Instrument 2007 No. 102

Issued by the authority of the Minister for Revenue and Assistant Treasurer

Corporations Act 2001

Corporations Amendment Regulations 2007 (No. 1)

The purpose of these regulations is to support the implementation of the Government’s Simplified Superannuation reforms announced in the 5 September 2006 statement A Plan to Simplify and Streamline Superannuation – Outcomes of Consultation.  These regulations complement other regulations supporting the reforms which were registered on 2 April 2007 and 13 April 2007. 

The Tax Laws Amendment (Simplified Superannuation) Act 2007 and related Acts give effect to the Simplified Superannuation reforms, making superannuation easier to understand, improving incentives to work and save, and providing greater flexibility over how superannuation savings can be drawn down in retirement.

Subsection 1364(1) of the Corporations Act 2001 (Corporations Act) provides that the Governor–General may make regulations prescribing matters required or permitted by the Corporations Act to be prescribed by regulations, or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Corporations Act.

The Regulations replace redundant references and terms as a result of the rewrite of superannuation taxation law. 

Details of the Regulations are set out in the Attachment.

The Corporations Agreement 2002 requires the Commonwealth to consult members of the Ministerial Council for Corporations before making amendments to the Corporations Regulations.  The responsible Ministers of the States and Territories on the Ministerial Council for Corporations have been consulted regarding the Regulations and no adverse comments have been made.

The Corporations Act specifies no other conditions that need to be satisfied 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.

ATTACHMENT

Details of the Corporations Amendment Regulations 2007 (No. 1).

Regulation 1 specifies the name of these regulations as the Corporations Amendment Regulations 2007 (No. 1).

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

Regulation 3 provides that Schedule 1 amends the Corporations Regulations 2001 (the Principal Regulations).

Schedule 1 Amendments

Items 1, 2, 3 and 4

Item 1 omits the definition of eligible termination payment from subregulation 1.0.02(1) of the Corporations Regulations 2001.  The Superannuation Legislation Amendment (Simplification) Act 2007 removes the concept of an ‘eligible termination payment’ from the Income Tax Assessment Act 1936, and consequently that definition is no longer required in the Principal Regulations 

The Tax Laws Amendment (Simplified Superannuation) Act 2007 introduces and provides a definition of a ‘superannuation lump sum’ into the Income Tax Assessment Act 1997 (1997 Tax Act).  This term replaces the concept of an ‘eligible termination payment’.  Item 2 will insert a corresponding definition of a ‘superannuation lump sum’ into subregulation 1.0.02(1) of the Corporations Regulations 2001.

Items 3 and 4 amend the definition of superannuation-sourced money to align the operation of that term with the new tax law concepts.  The definition continues to refer, in part, to eligible termination payments as the definition of superannuation sourced money allows payments received as eligible termination payments prior to 1 July 2007 to be included as superannuation sourced up to 6 months after the payment is received.  The other reference to an eligible termination payment is replaced with the new term, ‘superannuation lump sum’. 

Item 5

As part of the Simpler Superannuation reforms superannuation taxation law is rewritten into the 1997 Tax Act.  This means that many existing references to the Income Tax Assessment Act 1936 need to be updated to refer to the 1997 Tax Act.  The definition of a complying superannuation fund and the definition of a constitutionally protected fund are now found in subsection 995-1(1) of the 1997 Tax Act.

Item 5 amends the definition of superannuation provider in subregulation 7.9.01(1) to update references to the Income Tax Assessment Act 1936 to the new provisions in the 1997 Tax Act.