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SMSFs warned on budget threat with CGT relief

SMSFs warned on budget threat with CGT relief

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Miranda Brownlee
28 April 2017 — 1 minute read

Certain proposals that are being floated for the federal budget this year could have implications with CGT relief, one industry lawyer fears.

DBA Lawyers director Daniel Butler says if an SMSF trustee has a segregated fund that is eligible for CGT relief, they may want to consider applying it before 9 May because of the risk that the CGT discount could disappear in the federal budget.

In a list of budget predictions, Tax Institute senior tax counsel Bob Deutsch rated a reduction or wholesale repeal of the CGT discount, including the 33-and-a-third per cent discount for superannuation funds, as one of the most likely measures to be adopted by the government.

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“So if you were a betting person and didn’t like legislative risk like most people don’t, then [perhaps you] should you exercise your CGT election before budget night this year if you want to take advantage of the one-third CGT discount,” Mr Butler told SMSF Adviser.

He warned that SMSF trustees may otherwise run the risk of the legislation for a reduction or removal of the CGT discount passing on 9 May.

“It may be jumping at shadows because if there’s a change it might only apply to assets that were purchased after the 9th of May,” Mr Butler said.

“It is a risk [though] and that is the trouble with the government continually changing the rules all the time. People do take decisions to lock out legislative risk. The trust in the super system is at an all time low with the recent super reforms after we were all promised there would be no adverse changes without consultation."

Mr Butler said the proposed change by Labor would remove the discount in respect of assets acquired after the date of change.

“They’ve said they won’t be retrospective so maybe [it won’t be an issue] but again I could not rule out that if there was a change, it was for disposals after a given date, rather than in respect of assets acquired after a given date.”

Miranda Brownlee

Miranda Brownlee

 

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

SMSFs warned on budget threat with CGT relief
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