(1) Schedule 1, page 3 (after line 4), before item 1, insert:

1AAA Section 90MD (at the end of paragraph (b) of the definition of operative time)

Add “or paragraph 90MLA(2)(c) as appropriate”.

(2) Schedule 1, page 3 (after line 9), after item 1, insert:

1AA After subsection 90ML(4)

Insert:

(4A) Subsection (4) does not apply if the splittable payment is made in circumstances in which section 90MLA applies.

1AB After section 90ML

Insert:

(1) This section applies if:

(a) a superannuation interest (original interest) a person has in an eligible superannuation plan (old ESP) is identified in a superannuation agreement; and

(b) a payment flag under section 90ML is operating on the original interest; and

(c) a splittable payment is made by the trustee of the old ESP to the trustee of another eligible superannuation plan (new ESP) in respect of the original interest as part of a successor fund transfer.

(2) If this section applies, then:

(a) the new interest in the new ESP is taken to be the original interest identified in the superannuation agreement; and

(b) the payment flag operates on the new interest; and

(c) despite section 90MK, the operative time for the payment flag in respect of the new interest is the time that the payment to the trustee of the new ESP is made.

(3) In this section:

successor fund transfer means the transfer of a person's superannuation interest in the old ESP in circumstances where:

(a) the new ESP confers on the person, in relation to the new interest, equivalent rights to the rights the person had in relation to the original interest; and

(b) before the transfer, the trustee of the new ESP had agreed with the trustee of the old ESP to the conferral of such rights.

(3) Schedule 1, page 3 (after line 22), after item 1B, insert:

1C At the end of Division 3 of Part VIIIB

Add:

(1) A flagging order made under subsection 90MU(1) in relation to a superannuation interest (original interest) a person has in an eligible superannuation plan (old ESP) does not apply to a splittable payment if the splittable payment is made by the trustee of the old ESP to the trustee of another eligible superannuation plan (new ESP) in respect of the original interest as part of a successor fund transfer.

(2) If the splittable payment is made, then the flagging order is taken to be made in relation to the new interest from the time that the payment to the trustee of the new ESP is made.

(3) In this section:

successor fund transfer means the transfer of a person's superannuation interest in the old ESP in circumstances where:

(a) the new ESP confers on the person, in relation to the new interest, equivalent rights to the rights the person had in relation to the original interest; and

(b) before the transfer, the trustee of the new ESP had agreed with the trustee of the old ESP to the conferral of such rights.

(4) Schedule 1, page 3 (after line 31), at the end of the Schedule, add:

5 Subsection 90MZD(2)

Omit “on any person who subsequently becomes the trustee of that eligible superannuation plan.”, substitute:

(a) any person who subsequently becomes the trustee of that eligible superannuation plan; or

(b) in a case where section 90MUA applies—a person who is the trustee, or any person who subsequently becomes the trustee, of the new ESP.