Despite the fact the proposed changes to superannuation included in the 2016 federal budget are yet to be legislated, advisers need to revise any existing SMSF strategies with their clients, the director of a top four accounting firm has said.
Speaking at the Super Central Bacon, Super and Eggs seminar in Sydney today, PricewaterhouseCoopers director Liz Westover said: “Don’t assume that any plans that you have on foot for your clients are going to remain compliant or appropriate.
“You need to go back and look at every arrangement and every client to look at new opportunities and to revisit what plans you already had in place for these guys and how these budget changes are going to impact on that.”
Westover cited the proposed changes to the work test as an example of how the proposed changes might require some special attention.
“So for all those people you said weren’t going to pass the work test at age 65, well they don’t have to pass a work test from 1 July 2017,” she said.
“So you need to go back and have a look if there’s another opportunity to get more contributions in for those particular clients.”
While the proposed changes to the system had created some uncertainty among advisers’ clients and reduced the lucrative nature of SMSFs as savings vehicles, Westover was adamant they remained an effective retirement savings vehicle.
“I don’t think we can let clients lose sight of that because despite the fact that, yes we have more restrictions on getting money into super, we’ve got restrictions around the $1.6 [million] of what can be in a pension phase and so on, don’t forget the balance of your superannuation above the $1.6 [million] is still only going to get taxed at 15 per cent and it’s still going to get the CGT (capital gains tax) discount,” she said.
“It is still a very effective retirement savings vehicle, so don’t let your clients lose sight of that.”