Specialist financial services lawyer Peter Townsend has questioned whether small businesses with self-managed superannuation funds (SMSFs) are being disadvantaged under the concessional limits announced by the Australian Taxation Office (ATO).
Townsend has pointed out that the ATO, for the fourth year in a row, has announced that the concessional limit for SMSFs will remain unchanged at $25,000 and the non-concessional at $150,000.
He questioned whether this outcome was prejudicing people with small businesses using an SMSF over wage earners using a public offer fund and whose contributions are indexed via the market increase in their salaries and the steadily increasing superannuation guarantee charge (SGC)?
"If these figures were indexed, for this year they'd be almost $28,000 and $167,000 respectively — $20,000 more into super than is currently allowed," Townsend claimed. "The three year non-concessional would be over $500,000."
Townsend said the anomaly raised questions about whether the Government was prejudicing the SMSF sector.
"We've all heard about the value of the tax concessions that the Government allows to superannuation," he said. "They seem enormous but those figures often don't refer to the other side of the ledger, namely the amount of money they'd have to come up with if people didn't or don't have that superannuation."
He suggested that the Government could choose to fix an upper limit for a fund's value of, say $5 million (indexed), and then not allow tax concessions for contributions that took the value of the fund over that limit.
"Perhaps the tax raised by reducing concessions above that limit could then be used to index the concessional and non-concessional limits," Townsend said.
