One boutique adviser has speculated that any recommendations stemming from the upcoming tax white paper are unlikely to be enacted until after the next election.
With leadership tensions rife within the federal government, Bluepoint Consulting principal Tony Bates told ifa sister title SMSF Adviser that while the Coalition government will eventually want to adopt some of the recommendations of the tax white paper as policy, “legislation is still a way off”.
“I think it would be politically challenging for the government, given the current political climate for the Coalition,” said Mr Bates. “I think they’d be pretty brave to take it on prior to an election.”
Aside from examining and changing the franking credit regime, which Mr Bates said is currently very generous, the tax white paper will likely also look to even up taxes between the pension phase and accumulation phase.
“They’ve said they’re looking at the relative rate of tax between the pension phase and the accumulation phase and they’ve been quite clear they want to even that up,” said Mr Bates.
“The way I’d interpret that is there’ll be taxes on pensions whereas at the moment a super fund in pension mode is tax exempt so I see that changing and likely to be policy.”
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