More relief on the cards for controversial tax proposal
The Federal Treasurer’s move to allow transitional provisions for certain arrangements affected by the proposed lifetime contribution cap on non-concessional contributions “could very well” pave the way for this shock budgetary measure to be tweaked, experts have suggested.
Mr Morrison indicated that transitional provisions will apply to SMSF members that were engaged in “sophisticated financing techniques” to purchase assets within an SMSF. In effect, some SMSF members who were relying on non-concessional contributions to honour pre-existing contracts will not be adversely affected by the government’s lifetime contribution cap proposal.
Senior manager for strategic advice at Perpetual, Colin Lewis, said this move from the government indicates it is possible that other elements of the lifetime cap contribution, such as the date it is effective from, could also change.
“It’s crystal ball speculation of course, but these things do happen. And the government have already made moves that are a huge relief for people with existing contractual obligations,” Mr Lewis said.
“Remember there’s also a consultation period with industry to come, so anything is possible,” he added.
Mr Lewis’ thoughts reflect the sentiments of McPherson Super Consulting director Stuart Forsyth, who said the move from Mr Morrison may be a sign of further positive developments to come.
“From our point of view, this creates an expectation that they’ll look at other reasonable cases as they come up. It gives us heart that there will be some scope to have influence still on these measures if the Coalition returns to government and if they’ve got control of the Senate,” Mr Forsyth told SMSF Adviser.