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SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993

PART 7 - PROVISIONS APPLYING ONLY TO REGULATED SUPERANNUATION FUNDS  

SECTION 66  ACQUISITIONS OF CERTAIN ASSETS FROM MEMBERS OF REGULATED SUPERANNUATION FUNDS PROHIBITED  

66(1)  Prohibition.  

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Subject to subsection (2), a trustee or an investment manager of a regulated superannuation fund must not intentionally acquire an asset from a related party of the fund.

History

S 66(1) amended by No 53 of 2004, s 3 and Sch 2 item 89, by substituting "a trustee" for "the trustee", effective 1 July 2004.

S 66(1) amended by No 199 of 1999.

66(2)  Exception - acquisitions of business real property and listed securities.  

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Subsection (1) does not prohibit a trustee or investment manager acquiring an asset from a related party of the fund if:


(a) the asset is a listed security acquired at market value; or
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(b) if the fund is a superannuation fund with fewer than 5 members - the asset is business real property of the related party acquired at market value; or
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(c) the trustee of a regulated superannuation fund acquired the asset under a merger between regulated superannuation funds; or
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(d) the asset is an asset of a kind which the Regulator, by legislative instrument, determines may be acquired by:

(i) any fund; or

(ii) a class of funds in which the fund is included.
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[CCH Note 1: For the purposes of paragraph 66(2)(d), Self-managed Superannuation Funds (Assets Acquired on Marriage Breakdown) Determination 2006 has been made, effective 28 December 2002 (see Legislative Instrument F2006L02884). It was repealed by Self-managed Superannuation Funds (Assets Acquired on Marriage Breakdown) Repeal Determination 2011, effective 17 November 2010 (see Legislative Instrument F2011L02122). Self-managed Superannuation Funds (Assets Acquired on Marriage Breakdown) Determination 2006 formerly read:

1. Name of Determination  
1 This determination is the Self-managed Superannuation Funds (Assets Acquired on Marriage Breakdown) Determination 2006.

2. Commencement  
2 This determination is taken to have commenced on 28 December 2002.

3. Application  
3 This determination applies to the trustee of a self-managed superannuation fund that acquires an asset on or after 28 December 2002 in the circumstances set out in the determination at clause 4.

4. Determination  
4 Subsection 66(1) of the Superannuation Industry (Supervision) Act 1993 does not prohibit a trustee of a self-managed superannuation fund (the acquiring fund) from acquiring an asset from a related party of the fund if:


(a) the asset is acquired for the benefit of a particular member of the acquiring fund by way of a transfer or roll over from the trustee of another regulated superannuation fund (the transferring fund); and


(b) the asset represents the whole, or part, of either:


(i) that member's own interests in the transferring fund; or

(ii) that member's entitlements as determined under Part VIIIB of the Family Law Act 1975 in relation to another person's interests in the transferring fund where that other person is the member's spouse, or former spouse, and


(c) the transfer or roll over occurs as a result of that member's marriage breakdown.

5. Definitions  
5 The terms used in this determination have the same meaning as used in the Superannuation Industry (Supervision) Act 1993 (SIS Act). They include the following definitions from subsection 10(1) of the SIS Act:

'asset' means any form of property and, to avoid doubt, includes money (whether Australian currency or currency of another country);

'member' has a meaning affected by section 15B of the SIS Act;

'Part 8 associate' has the same meaning given by Subdivision B of Division 1 of Part 8;

'related party' , of a superannuation fund, means any of the following:


(a) a member of a the fund;


(b) a standard employer-sponsor of the fund;


(c) a Part 8 associate of an entity referred to in paragraph (a) or (b);

'self-managed superannuation fund' has the meaning given by section 17A of the SIS Act.

In section 66 of the SIS Act 'acquire an asset' does not include accept money - subsection 66(5) of the SIS Act.

]

[CCH Note 2: For the purposes of paragraph 66(2)(d) Superannuation Industry (Supervision) (related party assets) determination No 1 of 2010 has been made, effective 23 July 2010 (see Legislative Instrument F2010L02134).]

History

S 66(2) amended by No 154 of 2007, s 3 and Sch 4 item 61, by substituting "legislative instrument" for "written determination" in para (d), effective 24 September 2007.

S 66(2) amended by No 199 of 1999, No 140 of 1994.

66(2A)  Exception - certain in-house assets.  

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Subsection (1) does not prohibit the acquisition of an asset by a trustee or investment manager of a superannuation fund from a related party of the fund if:


(a) the acquisition of the asset constitutes an investment that:


(i) is an in-house asset of the fund within the meaning of subsection 71(1); or

(ii) would be an in-house asset of the fund within the meaning of subsection 71(1) apart from the operation of Subdivision D of Part 8; or

(iii) is a life insurance policy issued by a life insurance company (other than a policy acquired from a member of the fund or from a relative of a member); or

(iv) is referred to in paragraph 71(1)(b), (ba), (c), (d), (e), (f), (h) or (j); and


(b) the asset is acquired at market value; and


(c) the acquisition of the asset would not result in the level of in-house assets of the superannuation fund exceeding the level permitted by Part 8.

History

S 66(2A) amended by No 53 of 2004, s 3 and Sch 2 item 89, by substituting "a trustee" for "the trustee", effective 1 July 2004.

S 66(2A) inserted by No 199 of 1999.

66(2B)  Exception - breakdown of relationships.  

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Subsection (1) does not prohibit a trustee or investment manager acquiring an asset from a related party of the fund (the acquiring fund) if:


(a) the asset is acquired:


(i) for the benefit of a particular member of the acquiring fund; and

(ii) from a trustee or investment manager of another regulated superannuation fund (the transferring fund); and


(b) at the time of the acquisition:


(i) the member and his or her spouse or former spouse are separated; and

(ii) there is no reasonable likelihood of cohabitation being resumed; and


(c) the acquisition occurs because of reasons directly connected with the breakdown of the relationship between the spouses or former spouses; and


(d) the asset represents the whole, or a part, of either:


(i) the member's own interests in the transferring fund; or

(ii) the member's entitlements as determined under Part VIIIB of the Family Law Act 1975 in relation to the interests of the member's spouse, or former spouse, in the transferring fund.

History

S 66(2B) inserted by No 117 of 2010, s 3 and Sch 3 item 2, applicable to acquisitions occurring on or after 17 November 2010.

Former s 66(2B) repealed by No 154 of 2007, s 3 and Sch 4 item 62, effective 24 September 2007. S 66(2B) formerly read:


66(2B) Disallowable instrument.  
A determination under paragraph (2)(d) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

S 66(2B) inserted by No 199 of 1999.

66(2C)  

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For the purposes of subsection (2B), the question whether the spouses, or former spouses, have separated is to be determined in the same way as it is for the purposes of section 48 of the Family Law Act 1975 (as affected by sections 49 and 50 of that Act).

History

S 66(2C) inserted by No 117 of 2010, s 3 and Sch 3 item 2, applicable to acquisitions occurring on or after 17 November 2010.

66(3)  Prohibition of avoidance schemes.  


A person must not enter into, commence to carry out, or carry out a scheme if the person entered into, commenced to carry out, or carried out the scheme or any part of the scheme with the intention that:


(a) the scheme would result, or be likely to result, in the acquisition of an asset by a trustee or an investment manager of a regulated superannuation fund, where the asset is acquired from a person who has a connection (either direct or indirect through one or more interposed companies, partnerships or trusts) with a related party of the fund; and
 View history reference


(b) that acquisition would avoid the application of subsection (1) to the fund.

History

S 66(3) amended by No 53 of 2004, s 3 and Sch 2 item 90, by substituting "a trustee" for "the trustee" in para (a), effective 1 July 2004.

S 66(3) amended by No 199 of 1999, No 43 of 1996.

66(4)  Offence.  

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A person who contravenes subsection (1) or (3) commits an offence punishable on conviction by imprisonment for a term not exceeding 1 year.

66(5)  Definitions.  

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In this section:

"acceptable percentage" (Repealed by No 199 of 1999)

History

Definition of "acceptable percentage" amended by No 121 of 1999, s 3 and Sch 1 item 42, by substituting "a superannuation fund with fewer than 5 members" for "an excluded superannuation fund", effective 8 October 1999. For transitional and saving provisions, see the history note under the heading to Pt 24B.

acquire an asset does not include accept money.

business includes any profession, trade, employment, vocation or calling carried on for the purposes of profit, including:


(a) the carrying on of primary production; and


(b) the provision of professional services;

but does not include occupation as an employee.

business real property , in relation to an entity, means:


(a) any freehold or leasehold interest of the entity in real property; or


(b) any interest of the entity in Crown land, other than a leasehold interest, being an interest that is capable of assignment or transfer; or


(c) if another class of interest in relation to real property is prescribed by the regulations for the purposes of this paragraph - any interest belonging to that class that is held by the entity;

where the real property is used wholly and exclusively in one or more businesses (whether carried on by the entity or not), but does not include any interest held in the capacity of beneficiary of a trust estate.

History

Definition of "business real property" substituted by No 199 of 1999, amended by No 169 of 1995; No 140 of 1994.

close associate (Repealed by No 199 of 1999)

History

Definition of "close associate" inserted by No 169 of 1995.

"direct control interest" (Repealed by No 199 of 1999)

History

Definition of "direct control interest" inserted by No 169 of 1995.

"exempt business real property" (Repealed by No 199 of 1999)

History

Definition of "exempt business real property" inserted by No 140 of 1994.

listed security means a security listed for quotation in the official list of any of the following:


(a) a licensed market within the meaning of section 761A of the Corporations Act 2001; or


(b) an approved stock exchange within the meaning of the Income Tax Assessment Act 1997; or


(c) a market exempted under section 791C of the Corporations Act 2001.

History

Definition of "listed security" amended by No 114 of 2010, s 3 and Sch 1 item 87, by substituting "the Income Tax Assessment Act 1997" for "section 470 of the Income Tax Assessment Act 1936" in para (b), applicable in relation to the 2010-11 year of income for a taxpayer and later years of income.

Definition of "listed security" substituted by No 123 of 2001, s 3 and Sch 1 item 326, effective 11 March 2001. The definition formerly read:

"listed security" means:


(a) a share; or


(b) a unit; or


(c) a bond or debenture; or


(d) a right or option; or


(e) any other security;

listed for quotation in the official list of a stock exchange in Australia, an approved stock exchange within the meaning of section 470 of the Income Tax Assessment Act 1936 or an exempt stock market within the meaning of section 771 of the Corporations Act 2001;

Definition of "listed security" amended by No 55 of 2001, s 3 and Sch 3 item 504, by substituting "Corporations Act 2001" for "Corporations Law", effective 15 July 2001.

Definition of "listed security" amended by No 199 of 1999.

primary production business has the same meaning as in the Income Tax Assessment Act 1997.

History

Definition of "primary production business" inserted by No 199 of 1999.

"relative" (Repealed by No 199 of 1999)

scheme means:


(a) any agreement, arrangement, understanding, promise or undertaking:


(i) whether express or implied; or

(ii) whether or not enforceable, or intended to be enforceable, by legal proceedings; and


(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.

66(6)  Real property used in primary production business.  

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For the purposes of the definition of business real property in subsection (5), real property used in one or more primary production businesses does not cease to be used wholly and exclusively in that business or those businesses only because:


(a) an area of the real property, not exceeding 2 hectares, contains a dwelling used primarily for domestic or private purposes; and


(b) the area is also used primarily for domestic or private purposes;

provided that the use for domestic or private purposes referred to in paragraphs (a) and (b) is not the predominant use of the real property.

History

S 66(6) substituted by No 199 of 1999, inserted by No 169 of 1995.

66(7)  

(Repealed by No 199 of 1999)

History

S 66(7) inserted by No 169 of 1995.

66(8)  

(Repealed by No 199 of 1999)

History

S 66(8) inserted by No 169 of 1995.


 



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