Actuarial research house, Rice Warner has labelled the Australian Labor Party’s (ALP’s) dividend imputation policy changes as remaining bad policy despite refinements.
It said that it was “extraordinarily bad” policy for six reasons:
The analysis said Rice Warner expected that other forms of growth assets such as infrastructure trusts, Real Estate Investment Trusts (REITS) and syndicated property would become more popular and more overseas listed shares would be bought in place of Australian companies.
The Rice Warner analysis noted that the proposed change came on top of the 2016 Budget changes which curbed the concessions for higher earners.
“We accept that there are still many members of SMSFs with very large balances (which Labor ignored when it did its comprehensive review of superannuation). If it is deemed that they need to pay more tax, there is a relatively simple solution. Simply have a limit on the total amount allowed to be held in superannuation at retirement,” the analysis said.
“At (say) age 65, limit an individual to (say) $3.2 million in total pension and accumulation and make them withdraw the excess (tax-free). Then, returns on the assets will be taxed in their personal return like any other investment.”
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