Marjon Muizer, director of Red Willow Super, said in a recent interview with ausbiz, that as the proposed start date of the legislation of 1 July 2026 looms, equalising member balances could be an option for SMSFs, especially if one person in a fund has a significantly higher balance than another.
“When new contributions are being made, perhaps allocating those to the person with a lower balance [is something to consider]. Some people might even decide to put money into their children’s super for example,” Muizer said.
“You do always need to keep in mind, if it’s allocated to someone else, basically you’re giving it to them and you probably can’t get it back. But another thing that we see quite often as well is spouse splitting. When your employer puts money into super, or if you’re putting money into super that you’re claiming a deduction for, you can choose that once it’s received by your super fund at the end of the year, to have it transferred to your spouse. There’s different ways where you can manage balances, sometimes within the family.”
Although Muizer said these types of strategies “may not be for everyone”, when they are coupled with uneven balances, they become more relevant as the goal is to reduce the risks that one member ends up in a much higher tax bracket than the other.
“It depends on the situation, but we definitely see people looking at different strategies such as equalizing member balances and also just considering the timing of when to take money out of super,” she said.
“With the new Div 296 tax applying from 1 July 2026, it means super balances will be assessed from 30 June 2027 so people still have a little bit of time to think about what they’re doing. We are seeing some people, especially with higher balances above $10 million, consider maybe taking assets out of super, but it’s still really very case specific.
“Tax is one factor, but you still also need to look at asset protection and things like estate planning and long-term objectives.”
Muizer continued that she has also noticed a trend of younger Australians now establishing SMSFs due a growing awareness of superannuation and its value.
“They want whoever is investing to do it well, or otherwise they’ll go elsewhere, or they might want to just look after it themselves. I think the reasons [for establishing an SMSF] are really just increased control and flexibility and younger people find themselves increasingly locked out of the property market so it means they’re looking at alternative investment options, and super is often their biggest asset, besides potentially their own home or an investment property,” she said.
“We see people moving away from traditional investments a little bit more, such as listed shares. There’s probably an increased allocation that we’re seeing to ETFs over the years and also just a rising interest in alternative investments such as cryptocurrency as well as precious metals like gold and silver.”
