Business News

Unknown aspect of FSI a concern

Specialist superannuation legal firm Townsends Business and Corporate Lawyers has identified the objective to better align the tax charged on the accumulation and retirement phases of superannuation as a continuing concerning aspect of the Financial System Inquiry (FSI).

The matter remains as an unknown factor as no recommendation was made to address the situation and instead has been left to the review of the tax system for a solution.

Likewise, improved integration between superannuation and the age pension will also be dealt with in the tax system review.

Furthermore, Townsends has nominated the comprehensive income product for retirement (CIPR) and the rationalisation of legacy life insurance and managed investment products as FSI sleeper issues.

In regard to the CIPR recommendation, the legal firm has emphasised it will not affect SMSFs as they will not be permitted or required to issue these types of products.

Townsends predicts the CIPR recommendation will eventuate in the development of MyPension products.

In relation to the rationalisation of legacy managed investment products and life insurance, the legal firm believes the product providers will benefit from cost savings and scale advantages as approval obstacles and restrictive tax settings will not apply when converting from the old offerings to current products.

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