Consultation on draft legislation for $3m tax in second half of year: Treasury

Treasury said in response to a query from ifa sister brand SMSF Adviser that submissions from all interested parties are being considered in the ordinary course of policy development.

At last week’s technical summit, SMSF Association chief executive Peter Burgess said the industry is expecting the draft legislation to be released by September before it passes through Parliament next year.

Once the draft legislation is released, industry bodies usually have around four or five weeks to respond.

Mr Burgess said the passing of the legislation will depend on support from the crossbench, whom he is hoping will ask for changes in regard to unrealised gains not being included in the calculations.

“We do expect this bill will be spun off into a Senate committee hearing and at that point there’s a good chance the SMSF Association will be asked to give evidence at that hearing, so that will give us another opportunity to push for a fairer calculation of earnings,” he said.

He said the focus of the SMSFA advocacy once the draft legislation is released will be centred around this issue to ensure that the government, and especially the cross bench, understand the impact it will have on the SMSF sector.

In May, Treasury told SMSF Adviser that the proposed super tax will not disadvantage any group and allows for both APRA-regulated and SMSFs to report on the same basis.

“The government’s approach to calculating the tax liability under the Better Targeted Superannuation Concessions measure balances simplicity of design with equity by leveraging existing fund reporting requirements,” a spokesperson from Treasury said.

“It treats individuals equally in applying a tax on large balances, whether they have an SMSF or are invested in an APRA-regulated fund.

“The alternative approach of reporting actual taxable earnings would require significant changes in reporting by APRA-regulated funds that would come at a cost to all their members, not just those with high balances.”