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Govt change could spell disaster for SMSFs

Rules to watch in the months ahead

SMSF trustees need to take into account certain legislative and regulatory changes that will come into effect from 1 July 2021.

The election of a Labor government as early as the second half of 2018 would likely result in major negative changes for the SMSF sector.

“One of the realities is that it’s likely this time next year we’ll have a Labor government and the Labor government is no friend of the SMSF industry,” CoreData principal Andrew Inwood told selfmanagedsuper.

“They will not try to make friends with the SMSF industry and they will not care because it’s not their membership base.

“It is a giant pool of funds that they would quite like to have some of.

“So how that’s going to play out, I don’t know, but I would bet that some of the incentives for people to start SMSFs will no longer be there.”

Inwood’s comments came as new research revealed economic and political concerns were prevalent among SMSF trustees.

The “2017 CoreData SMSF Service Provider Research” found, where multiple answers were allowed, 64.6 per cent of trustees believed the performance of the Australian economy would affect their saving and investment intentions in the next 12 months.

This was followed with 54.1 per cent holding concerns about Australian interest rates and 51.9 per cent indicating change to financial legislation, such as superannuation and tax, would affect their saving and investment intentions in the next 12 months.

Last month, the Tax Institute called on the industry to work towards protecting and safeguarding the SMSF sector to ensure the government did not “stuff it up”.

“The SMSF sector is an extraordinary growth industry and one that we need to protect and guard very carefully,” Tax Institute senior tax counsel Robert Deutsch said at the opening of the association’s National Superannuation Conference in Sydney.

The CoreData report was based on 675 valid responses from trustees and was conducted between May and July.

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