A major industry body has given the Federal Government’s proposal to increase the maximum number of members in self-managed superannuation funds (SMSFs) from four to six, saying it would provide more flexibility and choice in the super system.
In a submission to the Senate Standing Committee on Economics, the SMSF Association said that the proposal would extend the benefits of SMSFs to larger families. This could benefit families with ageing members, as there would be younger members to make administrative and investment decisions for the fund.
The submission said that the proposal would also advantage small business owners who had shifted their business premises into their SMSFs, as it would allow them to pool their balances together.
Further, it highlighted tax benefits, saying that it offered potential to increase an SMSF’s taxable income via greater contributions and earnings in the accumulation phase, which could prove particularly helpful should Labor’s franking credit reforms go through.
“This would provide extra flexibility for franking credits to be used to offset tax liabilities instead of being paid as refunds,” SMSF Association chief executive, John Maroney, said.
The Association still used the submission as a chance to hit out against Labor’s reforms once again however, despite saying that the member number amendment should be treated as a “non-controversial change to the SMSF sector”.
“Although this would result in more consistent treatment of franking credits with most large superannuation funds, it also serves to highlights one of the inequities of any proposal to deny franking credit refunds,” Maroney said, speaking on the submission.