From an SMSF perspective, the last few Budgets have been relatively inconsequential, and it was more of the same again for SMSF investors in this year’s Federal Budget.

While the lack of any radical changes to superannuation is welcomed, it is disappointing that some of the key issues highlighted in our pre-budget submission have not been addressed. Our wish list included proposals to:

• Provide social security concessions to ensure those taking advantage of the recently introduced legacy pension amnesty are not disadvantaged by claw-back assessments,
• Address issues on the treatment of specific fund expenses as non-arm’s length expenditure and the disproportionate outcomes arising from the operation of the capital gains tax method and calculation of fund taxable income,
• Simplify the total superannuation balance tests, including the operation of the non-concessional contribution caps and the distortions arising from asynchronous indexation,
• Simplify the operation of transfer balance cap indexation, removing the complexity of individual transfer balance caps, and
• Modernisation and simplification of the notice of intent to claim a tax deduction process.

Further, the SMSF Association’s call to take the ill-conceived Division 296 legislation off the table and work with industry on an equitable solution to the problem the Government is trying to solve, have been ignored. This means that the Government will take this policy to the election, as tabled in the Parliament. The Bill remains stalled in the Senate and will lapse when the Federal election is called and the Parliament is dissolved.

The following is a brief summary of the key changes relevant to the SMSF sector.