The accuracy of the content is not guaranteed. Please rely only on the authorised document. HUNDREDS of Australians running their own self-managed superannuation funds could face large capital gains bills under the new July 1 tax changes for assets they believe to be exempt, according to the Financial Planning Association (FPA). FPA spokesman Mr Ian Chester Master said whilst many trustees of complying self-managed funds were now aware of the changes which will allow for the taxation of unrealised capital gains when a super fund alters to being a pension fund, they are unaware of significant changes made in June 1988. "Most people are aware that assets purchased prior to 20 September 1985 carry an exemption from capital gains on disposal," said Mr Chester Master of Bernays Brown Patrick & Hishon Investment Services. "However, the change to the taxation rules for super funds in 1988 meant that all assets were deemed to be acquired by the complying super fund at 30 June 1988 and hence are subject to capital gains upon disposal. "There will be many trustees of complying self-managed funds holding assets they acquired prior to 20 September 1985, believing they won't be caught by this latest change to tax unrealised gains when they convert to a pension fund. "But the fact is, this is the group that is likely to be most affected, as they will have the greatest unrealised gains." Describing the change as a "sleeper" which could reap the Government millions of dollars, Mr Chester Master said such trustees had just one month to consider switching to a superannuation pension to avoid a CGT bill. He described the typical investor affected by the change as an individual with a self-managed superannuation fund comprising assets such as shares or property purchased prior to 20 September 1985. If such assets were converted to a superannuation pension fund now and then sold, no CGT would apply. That will no longer be the case post July 1. "Trustees of complying self-managed funds in this category need to look very closely at whether they should commence a superannuation pension income stream prior to 30 June 2000," Mr Chester Master said.
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