Super performance test top of advisers' minds
Since the announcement of the Budget two weeks ago, financial advisers have had the most questions about how the annual superannuation fund performance tests would work, according to Colonial First State (CFS).
CFS said the top three topics regarding the Budget were the performance tests, personal tax cuts, and business tax initiatives.
CFS technical services manager, Craig Day, said: “Some advisers [are] querying whether the annual performance tests could lead to some MySuper funds (and certain choice funds 12 months later) reviewing their investment strategies and potentially leading to increased fund consolidation as funds seek to merge to gain scale, reducing costs”.
On personal tax cuts, Day said advisers wanted to know how the cuts would work for low and middle income individuals.
“It’s important to note that while this group will benefit from both the stage two tax cuts and the retention of the low and middle income tax offset (LMITO), this will only apply for this financial year as the LMITO will cease to apply from 1 July, 2021,” he said.
For business tax incentives advisers were interested in how to invest in their business and get a full deduction for the cost of any depreciable assets such as new software or IT equipment that was used or would have been installed for use by 30 June, 2022.
“The temporary loss carry-back measure will allow an eligible business to access their losses earlier and generate a cash refund to provide a needed cashflow boost,” Day said.
“An eligible business is able to carry back its losses from 2019-20, 2020-21 or 2021-22 to offset previously taxed profits from the 2018-19 year onwards. However, an eligible company with losses in 2019-20 will need to wait until it lodges its tax return for the 2020-21 income year before it can receive the cash refund.”
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
