After the completion of the 2014 Murray report and the Government Tax White Paper expected to be released soon, we may see some changes in the upcoming budget to try and make the tax and super system “fairer” and gain some further taxes for the Federal budget deficit. Some of the changes include:
- Changes to claiming concessional contributions to super
- Tightening the ability to contribute non concessional contributions to super
- Taxing pension funds
- Taxing the earnings over a certain limit on pensions funds, ie a benefit tax
- Deleting imputation credits from being claimed back in super funds
- Forcing super funds to limit and capital allowed to be withdrawn from super
- Forcing super funds to place a portion of the members super balance in annuity products (note smsf’s exempt)
- Making significant changes to Limited recourse borrowing arrangements within super funds or banning them outright
Please note the Government has a history of grandfathering some rules but its best to plan for the worst case scenario.
It is strongly suggested that your superannuation fund be reviewed with a possibility of restructuring where possible to limit the impact of any of the above especially where the members are in pension phase or over 60 years. An area that could benefit from a review could be where the super fund owns all the units in a unit trust that holds a property. This is a very complex area and requires written advice in this area as the risks of error could have dire consequences.
If you have any queries in relation to these possible changes please contact Simon Flowers of our office.