The SMSF Association has pushed the government to re-open its consultation on a higher tax rate for members who have more than $3 million in their super.
The measure was introduced in last night’s federal budget and would come into force from 1 July 2025.
However, the SMSF Association felt the measure has been brought in too quickly and called for a longer consultation period, particularly to assess the impact on self-managed super fund (SMSF) members.
SMSF Association chief executive, Peter Burgress, said: “The previous consultation phase was only 18 days, including Easter, and that was simply insufficient time for the industry to fully identify all the issues. We understood the need to finalise things for the Budget, but that should not come at the expense of rushing important legislation with unintended consequences.
“If the Government proceeds with the taxation of unrealised gains as proposed in their consultation paper released in late March, given many small business premises and farms are owned by SMSFs, this new tax could drive up their costs substantially at a time of unprecedented cost of living increases. Therefore, it’s important the full impact on taxpayers, including small business owners and primary producers, is fully explored.”
Under the current methodology, Burgress felt this was discriminatory against those funds which could identify and report their actual taxable earnings attributable to each member to the Australian Taxation Office (ATO).
“We stand by our position that using a member’s total super balance to calculate earnings is neither simple nor fair. By definition, a member’s total super balance includes unrealised gains and a growing list of items that will need to be excluded to ensure ‘earnings’ for the purposes of this new tax are not overstated.
“This methodology discriminates against those funds who can identify and report to the ATO actual taxable earnings attributable to each member.”
