Powered by MOMENTUM MEDIA
SMSF adviser logo
subscribe to our newsletter

Give funds the option on calculations: SMSFA CEO

peter burgess smsf sa ey7wrw
By Keeli Cambourne
20 April 2023 — 2 minute read

At a meeting with Treasury on Monday, SMSFA CEO Peter Burgess and a small working group of industry experts put forward their case on the consequences of the proposed $3 million super tax.

“We expressed to Treasury that we are concerned that they are building a system to suit the large APRA funds even though 75 per cent of those who will be impacted by the new super tax proposal will be SMSF members,” Mr Burgess said.

“We wanted to emphasise that it is important that we have a system that is equitable for all funds and asked Treasury to consider using actual earnings to calculate the tax rather than the method that is currently proposed.”

Mr Burgess said in its consultation paper, Treasury had mentioned this was an option but it had been discounted early because of the difficulties Treasury saw for APRA funds in reporting actual earnings attributable to members.

“Treasury said that it would require a significant amount of reporting and system changes,” Mr Burgess said.

“The point we were making was the SMSF sector can do this and although it may require some changes to the reporting system, we also understand that some APRA funds can already report actual earnings and we wanted the opportunity to propose an opt-in situation.

“Our proposal was, that if funds can’t report on actual earnings then they could report on the deeming rate.”

Mr Burgess said although there was no commitment either way from Treasury, it did say it would take onboard the Association’s concerns and proposal.

“We would like to think it hasn’t been signed off and that there is still time for the Government to reconsider the approach,” he said.

“Treasury is keen for a simple approach which is why they have landed where they have.

“But what’s coming out every day is [the industry] is hearing about the amounts that will have to be excluded from the TSB and that list is growing. It’s not as Treasury has assumed.”

Although Mr Burgess said he did not expect Treasury to change its mind on the $3 million threshold, he hopes it may reconsider the way in which earnings are calculated.

“I don’t believe Treasury realised there would be so many things that had to be discounted from the TSB calculation,” he said.

“What we have found is that it is very unfair they are putting a model forward for SMSF to pay tax on unrealised gains simply because large funds will find it difficult to report.

“[Treasury] was trying to avoid APRA funds having to make major changes to their system and their reporting, but TSB is already reported and although I can see the complexities for APRA funds to report, our alternative is a simpler approach.

“All we ask is that Treasury at least give funds the option – let those that can report actual earnings do it and if not apply the deemed earning rate.”

 

You need to be a member to post comments. Become a member for free today!

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning