Family trust may become new SMSFs
The Federal Government's proposed changes to superannuation in the 2016 Federal Budget (‘ScoMo' changes') may amount to the demise of self-managed superannuation funds (SMSFs) as the preferred private wealth investment vehicle, according to SuperCentral.
Although the SMSF service provider said that this view might be "overstating the situation", it also stressed that tax deductible contributions could only be made to superannuation funds and not to family trusts.
According to SuperCentral, the tax rates that were at 15 per cent and 10 per cent respectively during the period before retirement and subject to zero tax in retirement, would generally be more advantageous for most family groups than the normal marginal rates even with the zero rate threshold.
Also, the controllers of the superannuation fund were not required to have to distribute the income to beneficiaries to avoid taxation at the top marginal rate.
"While the significant ScoMo changes are negative (the less significant changes are generally beneficial), they have not entirely eroded or neutralised the taxation benefits of superannuation," SuperCentral said.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
