Confirmed: What makes SMSFs major victims of $3m super cap

Mike Taylor

Managing Editor/Publisher, Financial Newswire

27 March 2023

New analysis of balances held within self-managed superannuation funds (SMSFs) has revealed why the sector is most up in arms about the Government’s looming $3 million cap superannuation tax concessions.

That analysis, undertaken by Wealth Data, confirms that the changed tax arrangements will capture close to 20% of self-managed funds.

The analysis reveals that 15.5% of all SMSF assets have between $2 million and $5 million in assets, but perhaps more importantly in terms of the Government’s policy intentions close to a further 5% have more than $5 million.

The WealthData analysis reveals just how wide the balance gap is with respect to Australian SMSFs, with 5.4% having less than $50,000 and nearly 60% having less than $500,000.

This is in circumstances where there are arguments that the minimum balance to make an SMSF a viable proposition should be $500,000 while some financial advisers have argued that it should be $1 million.

WealthData principal, Colin Williams said that just as interesting as the level of balances held in SMSFs was the assets making up those balances, with cash and listed shares still dominating.