The federal opposition’s proposal to end cash refunds for excess dividend imputation credits should ring alarm bells for SMSFs about the risks of home bias in investment portfolios.

SMSF entrants will hesitate to invest in self-funded retirement on the back of the Labor Party’s imputation credits policy proposal, according to the Institute of Public Accountants (IPA).

Practitioners in the industry have voiced their worries over the high increase in registration fees in order to fund the Australian Securities and Investments Commission (ASIC), according to one institutional body.

Removing the cash refunds for excess imputation credits for super funds will affect existing SMSF strategies and prompt a measured rethink for new strategies, a technical expert has said.

Removing dividend imputation credit refunds could result in unintended consequences, including driving a bias to certain asset classes or distorting the system in other ways, according to several industry bodies.

The Federal Court has ordered Perth-based property scheme Superfunded be wound up after an Australian Securities and Investments Commission (ASIC) investigation found it encouraged or promoted the illegal early release of super via the establishment of an SMSF.