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Superannuation is a major asset that you acquire and grow over your working life. If you are in a relationship such as a marriage or de facto that experiences a breakdown you will have to make a decision as to how your assets are divided. Superannuation is a type of property that also needs to be dealt with when couples separate. Superannuation splitting law lets separating couples value their superannuation and split superannuation payments. Superannuation splitting needs to be performed in a manner that complies with superannuation law and the associated release requirements. Consultation with an experienced Tax and Superannuation Law can ensure that your superannuation split is handled in an efficient and legally compliant manner.

The process in splitting your superannuation is procedural and may be complex. Firstly, you need to obtain a valuation by either requesting it from the trustee of your superannuation fund (for retail and industry funds), or engaging an accountant to value your superannuation. Then you need to reach a method of splitting by either negotiating and reaching an informal written agreement or obtaining a court order. A formal written agreement requires that both parties obtain independent legal advice and sign a certificate to that effect. This option negates the need to apply to the Family Court. The agreement is not registered in court and you must be careful that each of you retains a copy, seek consent orders to split superannuation.  If you cannot reach an agreement it is necessary to seek a court order to split superannuation. This process is quite procedural, requires filing fees to be paid and a Financial Statement to be prepared along with other court documents.  Even when an application is made to a court, it is possible to reach an agreement at any stage, without the need for a court hearing. Engaging an experienced Tax and Superannuation Lawyer throughout this process may be of great assistance during this process.

There are a number of taxation consequences when a payment split occurs after a court order is made or a superannuation agreement is entered into. A superannuation lump sum paid to, or a  superannuation interest created for, a non-member spouse (a party to either a marriage or a de facto relationship) after a payment or interest split is treated as a separate superannuation benefit for the non-member spouse. The components of the benefit are split in the same proportions as the overall split. If a non-member spouse’s entitlement is paid as a superannuation income stream, it is treated as a separate superannuation income stream for the non-member spouse. Capital gains or losses arising from the creation of rights when a superannuation agreement is entered into or terminated are disregarded. There is a CGT exemption for payments made from a superannuation fund or ADF to non-member spouses. CGT roll-over relief is available for in specie transfers between a small superannuation  fund (funds with fewer than five members) and another complying  superannuation  fund. 

Comprehensive financial and legal advice may be immensely invaluable and advantageous when you are in the process of a superannuation split. This may be helpful in ensuring the split is equitable, mutually agreeable and that any tax implications are minimized. If you would like further information, wish to discuss your Superannuation matter with us or would like to arrange an appointment, please do not hesitate to contact us by telephone on (02) 9233 4048 or by email to info@navado.com.au. 

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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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