In its 2022-23 federal budget submission to Treasury this week, the peak body listed TBCs – the limit on how much superannuation can be transferred from an accumulation superannuation account to a tax-free “retirement phase” account – as its top priority, saying the introduction of indexation last year has added greater complexity to the superannuation system.
SMSF Association chief executive John Maroney said the shift has caused major issues, including for financial advisers.
“As our submission points out, the system has shifted from having a single cap to individual caps ranging from $1.6 to $1.7 million,” Mr Maroney said.
“This is causing confusion and increased costs across the sector. Inevitably, mistakes will be made, leading to inadvertent breaches of the TBC. This situation is being compounded by the lack of access for financial advisers and SMSF administrators to the ATO reports that are needed to obtain an individual’s TBC.
“In our opinion the use of a single cap will reduce costs, uncertainty and benefit all stakeholders – a position, we believe, is strongly supported across the SMSF sector.”
The TBC recommendation was one of many made by the SMSF Association, which also includes reducing the number of total super balance thresholds, axing the registration cancellation fee that applies to approved SMSF auditors and indexing key small-business capital gains tax concession thresholds.
Commendable submission. The single biggest impediment to effective superannuation advice surrounding SMSF pensions and contributions is the lack of data fed member information to SMSF administration software. This needs to be fixed urgently.