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Low balance SMSFs to 'bear the brunt' of Labor's tax policy

Low balance SMSFs to 'bear the brunt' of Labor's tax policy

Stop, hand, warning
Miranda Brownlee
21 March 2018 — 1 minute read

Labor’s plans to stop cash refunds of excess imputation credits is likely to have a greater impact on pension members with low balances rather than those with high balances due to the transfer balance cap, says a technical expert.

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.


Low balance SMSFs to 'bear the brunt' of Labor's tax policy
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