Industry Super Australia is in the news for Bill Shorten’s plan to take away the tax refund that some SMSF’s and low income individuals receive for the franking credits attached to dividends received from their investments.
It would seem that Industry Super Funds, many of which have links to associated Trade Unions, would like to be given this competitive advantage over SMSFs to discourage their members from taking control of their own superannuation investments.
Industry Super Funds receive franking credits from their investments and simply use them to reduce the overall tax they pay. The franking credits received on behalf of those of their members who are in pension mode and typically would be exempt from tax on their earnings are simply offset against the 15% tax of those members not yet in pension mode. Industry Super Funds would seem happy to receive in full the franking credits for members in pension mode but want SMSF pension members to be denied the franking credits.
Perhaps self-interest is more important to them than the “fair go” of equal treatment fundamental to the Aussie Culture.
This is my personal view on subjects that interest me. It does not necessarily represent the firm’s view on those subjects – just mine!
25 May 2016. Like many of us I do not agree with the government’s position on superannuation as represented by the recent Budget proposals. In particular, I think the “lifetime cap” on non-concessional contributions of $500,000 is inconsistent with what many understood to be the prime objective of our superannuation – to encourage us to save to provide for our retirement and reduce the reliance on government pensions. For those nearing retirement and who had expected to be able to add to their super once they no longer had as many family expenses, the limit of $500,000 may well prevent them from building a sufficient balance to support their retirement. $500,000 will not last long for those fortunate enough to enjoy a life into their eighties and beyond. The relatively minor savings achieved by the lifetime cap will likely be dwarfed by the increase in government pension that results.
We have completely restructured our website with a modern look and design that adapts to the device used to view the website. Whether using a large screen desktop or a compact smartphone, we want to meet our client’s needs in the office or on the go.
In this fast changing world our aim is to continue to provide our services in a warm and friendly environment while utilising evolving technologies for the benefit of those who wish to use them. Some things are best done with a traditional face to face meeting here in our office where we can connect at a personal level as well as provide the services our clients expect and value. At other times our clients will want to use the expanding range of communications capabilities from simple requests or providing information, through to meeting their needs in complex matters.
We see our new website as the means to both improve the delivery of our services as well as expand the provision of information you want. We are looking forward to hearing from you about what you would like to see added to the website as well as any suggestions of where we can do better.
The Piatti Team
One of the most complex and controversial aspects of both taxation and financial management is superannuation. As a major social policy introduced many years ago to encourage Australians to provide for their retirement rather than rely on government pensions, it continues to grow as both an industry and of course the place where Australian’s store their wealth until they retire.
For many years Australians have turned to their Tax Agent and accountant for advice on super simply because it had such an impact on their tax. Following the scandals that resulted in many Australians suffering huge losses of their savings because of poor financial advice from those selling dubious and unsuitable “investments”, the government set up a financial services regime to protect the consumer by limiting financial advice to those with appropriate qualifications and expertise. Although some accountants chose to also become financial advisors (and obtained the appropriate financial services licence) most preferred to concentrate on tax and accounting and were granted an exemption in the area of superannuation that allowed them to provide advice and set up a Self Managed Superannuation Fund (SMSF) for their clients.
After 30th June 2016 the above accountants exemption no longer applies and to advise in the area of superannuation and set up an SMSF we need to have a financial services licence for the area of superannuation. We have that licence and will continue to provide superannuation services to our clients without any interruption or change in what we do.
Although the area of superannuation is quite complex with many rules and changes on a regular basis, for most clients the set appropriate to their specific circumstances is easily explained and we are always ready to talk about what might impact you.
For those looking for additional information there are many sources of the facts (and even more of opinions!) including the Tax Office website (https://www.ato.gov.au/super).
The Piatti Team