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2019 a year of scrutiny for SMSFs
2019 has been a year of scrutiny for the self-managed superannuation fund (SMSF) industry, as it dealt with the federal election, Australian Tax Office (ATO) regulation and the government’s retirement income review, according to SMSF technical specialist Heffron.
Franking credits and negative gearing became issues at the forefront of the election as older Australians turned away from Labor’s polices.
Meg Heffron, Heffron managing director, said: “Whatever you think of negative gearing or the refunding of excess franking credits, the electorate certainly decided that changing the rules suddenly and without notice was fundamentally unfair on the retirement incomes of older Australians”.
In the case of tax regulation, the long-term success of the SMSF sector was dependent on proving the funds and who advises them were compliant with the rules.
“It is gratifying to see the ATO flex their muscles with recalcitrant funds. The tax regulator has definitely become more assertive and active. They’ve been ramping up penalties on SMSF trustees who break the rules and taking a much tougher stance on late lodgement of returns,” she said.
Announced in September, the Federal Government’s retirement income review, was expected to dominate the 2020 agenda.
Martin Heffron, director and policy expert for Heffron, said the retirement income review’s mandate to gather facts rather than make recommendations gave it enormous potential.
“If it were charged with making recommendations, political pressure might cause it to hold back on contentious issues. Instead, if compelling enough, facts about taboo areas might prompt major policy action,” he said.
“This may include the factual impact of politically controversial policies such as the generous treatment of the Australian family home for tax and benefit purposes.
“The review could also factually describe the size of tax concessions that get wasted when retirees take lump sums.”
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