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Couples going through divorce proceedings will be able to access their partner’s superannuation information more easily in future.
From 1 April 2022 the Australian Taxation Office (ATO) will be able to release this information to a family law court.
If one of the divorcing parties believes the other is not being forthcoming about the value of their super assets, they’ll be able to apply to the court to have the information disclosed.
Previously, unless the information was willingly supplied, it had to be obtained through expensive and time-consuming subpoenas or court orders.
In making it easier to access super information, the new laws will reduce the risk of a partner under-reporting their super and getting away with it.
This is especially important to women who — because they do most of the caring for children and thus work less than men — retire with around 42% less super than men.
In a divorce, super is treated like any other asset and included in the division of assets in a property settlement or financial agreement.
There are generally three ways of dealing with super benefits on separation, namely:
If a superannuation account is split, the funds are often rolled over or transferred into the receiving spouse’s super account and remain there until they’re legally allowed to access it.
The funds retain the taxable and tax-free components of the account from which the funds are being transferred.
If the super is held in an SMSF, there are extra considerations, especially if, as is often the case, the divorcing couple are trustees of the same two-member SMSF.
Unsurprisingly, it’s common for one member to step down from the SMSF when they divorce.
While an SMSF cannot normally acquire assets such as residential property from a related party, it can when the acquisition stems from a marriage breakdown.
In this case, the rules allow an in-specie rollover under a court order or financial agreement, saving the former couple from being forced to sell the property.
The spouse to whom the property is transferred does not have to pay any capital gains tax on it.
If you and your spouse are contemplating divorce and you’d like some advice on your finances, including how best to deal with your super upon separation, we can help.
Contact us for a complimentary consultation at info@rjswm.com.au or on (03) 9794 0010.
For more information on our services, CLICK HERE.
This blog has been prepared by RJS Wealth Management Pty. Ltd. ABN 24 156 207 126. RJS Wealth Management Pty. Ltd. is a Corporate Authorised Representative (No. 438158) of Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licensee (Number 233209). The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individual’s personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.