The Financial Services Council (FSC) has welcomed the passage last week of the Treasury Laws Amendment Bill, which gives merging superannuation funds permanent capital gains tax relief.

The temporary measure had been due to expire on July 1.

“This relief has been extended several times, and we are pleased to see the Government delivering on its Budget announcement to make this a permanent policy,” FSC CEO Sally Loane said.

“With many merger and consolidation programs underway across the superannuation industry, it is vital that superannuation funds have certainty that existing policy settings will continue.”

The measure is one of the recommendations made by the Productivity Commission in its final report to the Government in December 2018 on ways to improve the superannuation system.

“The current arrangements remove unnecessary impediments that would otherwise apply to mergers by allowing super funds to transfer revenue and capital losses to a new merged fund and to defer taxation consequences on gains and losses from revenue and capital assets,” Assistant Treasurer Michael Sukkar had said in February when the bill was read a second time.

“Extending the relief will give fund trustees certainty when planning merger activity and will provide wider benefits to fund members and the superannuation system as a whole through increased fund scale and efficiencies.”