SMSF Association digs in on large super balances
The Government expected budget move to cap superannuation balances has been firmly opposed by the SMSF Association despite an acknowledgement that high balances fall outside the policy intent of superannuation.
The SMSF Association’s Policy and Advocacy head, Tracey Scotchbrook told the organisation’s national conference in Adelaide that action was not necessary on the part of Government because the introduction of Transfer Balance Caps had ensured it was a legacy issue which time would resolve.
“Our fear is that a system that is already complex with multiple caps and thresholds will become even more so, and, consequently, having a negative impact on consumer confidence in superannuation,” she said.
“We are also concerned that this debate is being framed as an SMSF issue when APRA-regulated funds also have large balances.”
Scotchbrook said a hard cap will raise investment issues for members, especially those who have illiquid assets.
“How much time will fund members have to act and what will be the potential disruption to markets with people being forced sellers. There is also the issue of the impact on fund administration and management costs, as well as the effect it could potentially have on other members of the fund.”
She says another concern is the potential for retrospectivity. “Any growth in fund investments has accrued in the current tax environment, so any changes to the taxation of unrealised capital gains would therefore have a retrospective effect.
“Gains accrued under the existing tax environment should continue to be taxed in the same manner, noting the CGT concessions that applied under the Fair and Sustainable superannuation reforms in 2016-17.”
Those individuals who have contributed personal injury compensation amounts or received insurance benefits in superannuation also should not be forgotten.
“These proceeds are essential for the funding of the ongoing care and needs for the lifetime of those individuals. Just like the current transfer balance cap and total superannuation balance rules, those proceeds must be expressly excluded from any proposed measures,” she said.
The government is fixing a problem that has already been solved on the basis they can’t fix the one’s that haven’t.
The mega funds got the biggest tax free ride ever from 2007 to 2017. 10 years of massive tax free unlimited pension benefits.
Time to kill these mega funds / balances over $10mill.
I can’t imagine many Personal Injury balances over $10mill ?? But sure leave them alone.
As for SMSF of almost half a billion $$$$$$ and the other mates over $100mill in Super Balances, cry me a river if they shouldn’t be paying more than 15% tax.
A sensible move in the war on Super.