Full pension SMSFs to lose $5k under Labor policy
Analysis undertaken by one of the major SMSF software firms has indicated that, in 2018, the average franking credit refund is above $5,000 for SMSFs fully in pension.
After analysing 2017 and 2018 franking credit data for SMSF tax returns lodged through Simple Fund 360 software, BGL Corporate Solutions has found that for a full pension fund with balances under $1.6 million, the average franking credit refund jumped from $3,343 in 2017 to $5,460 in 2018.
For a fund with pension balances over $1.6 million, the average franking credit refund has gone from $19,470 in 2017 to $18,333 in 2018.
The data also showed that 77 per cent of SMSFs have balances under $1.6 million.
BGL managing director Ron Lesh said that some of the behaviours by SMSF trustees, particularly those with larger funds, have already changed in response to Labor’s proposal to remove cash refunds for franking credits.
“BGL analysed the data for three types of SMSFs: those in full pension mode, those in part pension mode and those in accumulation mode,” Mr Lesh said.
“The data clearly shows larger SMSFs have already changed their investment strategy to reduce franking credit refunds.”
Mr Lesh said that Labor’s policy was a “ticking time bomb” for the superannuation industry.
“People who have saved all their lives, put their money into super as successive governments have told them, are now having money taken out of their back pockets. The proposed policy is simply unfair,” he said.
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 also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
