SMSF

Super tax breaks to go under the knife?

Here we go again…  The rumour mill is in full-swing with news that the Labor Government will look to target superannuation in their pursuit of bringing the budget back to surplus.  This video courtesy of SkyNews reports that super concessions are set to be cut back in the upcoming budget.

What do you think?  What rumours have you heard?  Share you views and comments by completing our poll:

Full details on the impact of the Federal Budget for SMSFs will be featured on thedunnthing blog following budget night on 8 May 2012.

Comments

comments

5 thoughts on “Super tax breaks to go under the knife?

  1. Transition to Retirement Income Streams is one area that I have heard could be targeted. This could be through excluding them from the extended concessional contribution cap from 1 July 2012?

  2. This is not before time. The Costello changes (tax-free super after age 60 with no limits) were always unaffordable in the long-term and amount to middle and upper class welfare on a grand scale. Tax-free super pensions/lump sums should be limited (to say $50,000) and the limited non-taxable amount included in assessable income with a rebate so no tax is effectively paid on the amount.

    And, yes I will be one of the beneficiaries of the current system, being a self-funded retiree (but under 60). I just think it is unfair that I should get money tax-free out of a system that is concessionally taxed in the first place, when those who are working pay tax at normal rates on their income.

    There are also lots of other anomalies in the super system that should dealt with eg anti-detriment provisions should be abolished, self-insurance deductions, tightening of ‘dependant’ definitions, etc.

  3. Hi Jenny,

    Thanks for your comments; the question of whether the benefits of Simpler Super were too good to be true have certainly come home to roost. The problem for the Government is that from a policy viewpoint they are trying to remove people from the income tax system and this would add many straight back in again. It’s a balancing act this one, because what ever they do will be politically unpopular.

    Regards,
    Aaron

  4. Aaron,
    I agree with your comments.
    Whether it is right or wrong, I think the Government’s hand will eventually be forced by fiscal necessity to reduce the superannuation tax concessions.
    As an auditor of SMSFs, I see a large pool of capital losses, and once these funds are in pension phase, tax free income to the fund itself, refunds of franking credits, along with tax free pensions paid to the over 60s. Couple this to an ageing population and it translates to a substantial hole in Government revenue in the longer term.
    I think the current Government has its hands full getting re-elected and will only be interested in doing just enough to get into the black. So it could be up to the next Government to make the changes. One thing I would be telling clients is to accept that there will be changes in the long run.
    regards
    David

  5. TTR would appear to be the obvious one to go. The intended use has been cleverly exploited by Advisers and rightly so, to achieve the best outcome for their client.
    Here’s an idea, if rules are implemented then they should affect all super eg; Commonwealth and State super.
    Anyway I don’t mind if the changes keep coming. As an Adviser it keeps me employed!

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