Meg's Musings – April 2024

02 Apr 2024
Meg Heffron

Meg Heffron

Managing Director

It seems crazy to me that the year has only just started and yet this is the last Meg’s Musings I’ll write before the Federal Budget.

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Budget Night this year is Tuesday 14 May and of course Heffron’s technical team will be poring over everything as it happens. Every year, I’m torn between hoping for a quiet night vs lots of interesting things to talk about in our webinar the next day.

Unfortunately the two things I would love to see most seem unlikely at this point – a fundamental re-think on the proposed tax for those with more than $3m in super (aka Division 296 tax) and the Government’s approach to Non Arm’s Length Expenses (NALE) in SMSFs. I’m not optimistic about either.

But if the Government does double down on the Division 296 tax, I really hope they also use this as an opportunity to finally provide the legacy pension amnesty that’s been promised for years now. Having said that, it’s been promised so many times that I have to confess, even if it’s re-announced, with conviction, as part of this year’s Federal Budget I don’t know that I will be any more confident it’s coming soon! And of course, there have been other promises made in previous’ years budgets that have yet to see the light of day : most notably changes to the residency rules for super funds that might help expats with SMSFs.

I don’t expect other major changes to superannuation laws – but of course I could be wrong. We will just have to wait and see for a couple of weeks!

Of course, the Heffron team will be monitoring it all – you can register now for our free webinar on Wednesday 15th May here and watch out for next month’s edition of Heffron Highlights when we’ll cover everything in detail.

In the meantime, many readers will have seen the ATO's recent mail out to thousands of SMSF trustees who may not be re-valuing their assets regularly. It was an interesting step by the Regulator - using the powerful array of information at their fingertips to proactively raise potential compliance issues. It's similar to the approach they took a few years ago in writing to clients with a significant exposure to one asset class to ask whether they had genuinely considered this concentration of risk in their investment strategies.

Of course, not everyone who has received a letter will have a valuation problem - much like not everyone who received a letter about their investment strategy had a problem. But as a practitioner, I think action like this from the ATO can be extremely useful for raising awareness of important requirements that might be misunderstood. How often have we all had to explain to clients (or even other professionals) that the "3 year rule" for property valuations is a myth and has been for many years now?

If nothing else, receiving that letter hopefully prompts a valuable conversation about the importance of regular and data driven asset valuations. They are critical for getting so many vital things right : pension minimums, total super balance, transfer balance cap reporting and more.


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