Last week, Labor announced its proposal for removing cash refunds for excess dividend imputation credits.
SuperConcepts general manager of technical services and education Peter Burgess said SMSF members who have had substantial pension balances in the past may not actually be impacted by the proposed changes to imputation credits.
“By virtue of the introduction of the transfer balance cap, many of these members may now have an accumulation interest in the fund and therefore their fund will have some taxable income to utilise imputation credits,” said Mr Burgess.
“It will be members with smaller pension balances, who reportedly are not the main target of this reform, who will bear the brunt of this change.”
Given that many SMSFs have not yet reported their 30 June 2017 pension balances, it’s not clear how, or if, the impact of the transfer balance cap has been factored into this measure, he said.
A very poorly thought out policy. If Mr Burgess’s is correct that savings do not take into account the implications of the TBC then the $59bn savings are likely to be halved.
There will be a greater impact upon lower pension balances and in the long term there will be a greater burden on thenpublic purse.
If HNW are the target then cap the amount of imputations credits that can be claimed.