ns with self-managed super funds face a hefty fine if they fail to lodge their tax return in the next 12 days – even though controversial new laws which could affect their retirement plans are yet to pass parliament.
The n Taxation Office imposes a $313 fine for every 28 days a lodgment is late, up to a maximum of $1,565.
The February 28 deadline also occurred as Parliament continues to debate Labor’s plan to double the concessional tax rate for super contributions, to 30 per cent, for those with a balance of more than $3million.
This means those with a self-managed super fund will have to plan their investments and lodge in the next 12 days, even though the Senate Economics Legislation Committee isn’t due to release its report until April 19.
Prime Minister Anthony Albanese’s new laws aren’t due to come into effect until July 1, 2025, with the Coalition opposed.
But H&R Block director of tax communications Mark Chapman said the uncertainty would still make it harder to plan for retirement.
‘This is potentially a problem because the measure is not yet law – which makes it extremely difficult to plan,’ he told Daily Mail .
ns with self-managed super funds face a hefty fine if they fail to lodge their tax return in the next 12 days – even though retirement saving laws are yet to pass Parliament (stock image)
Should Labor’s legislation pass the Senate, ns with more than $3million in a self-managed super fund would receive a notice of assessment from the tax office, starting in the 2025-26 financial year.
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For the first time, those with a self-managed super fund will be taxed on unrealised capital gains – or the value of superannuation assets like shares that haven’t been sold.
‘This new tax liability will be inclusive of any unrealised capital gains within the fund and its investments – traditionally unrealised capital gains have not been subject to tax, now they will be,’ Mr Chapman said.
‘There is a risk that you could be paying tax on an investment that ultimately pushed you above the $3million threshold, but then when you eventually sell it, the asset drops back down below the $3million mark and the total value of the fund drops down below $3million.
‘The tax is imposed on the individual, requiring the individual to pay the tax personally or opt to have the amount released from their superannuation entitlements.’
Mr Chapman said those with a super balance approaching $3million needed to be particularly careful.
‘If you have a total super balance of over $3million, you will be affected,’ he said.
‘If you have a total super balance approaching $3million, you should certainly be aware of the changes, and maybe plan to put in place mitigation strategies.’
With Labor needing the support of the Greens and crossbenchers to get its legislation through the Senate, Mr Chapman said it would be unwise for self-managed super funds to make major decisions before the new law was enacted.
‘SMSFs would be wise not to implement any planning until these new measures become law,’ he said.
ns had $3.57trillion in superannuation in the 2022-23 financial year.
Of that pool, $876billion of that was in a self-managed super fund, n Prudential Regulation Authority data showed.
The government estimates only 80,000 people or 0.5 per cent of the population has more than $3million in super.
Prime Minister Anthony Albanese’s new laws aren’t due to come into effect until July 1, 2025 but the uncertainty is worrying tax experts (he is pictured right with his fiancée Jodie Haydon)
The Financial Services Council calculated this would affect 500,000 people in coming decades, now under 30, because the $3million threshold under Labor’s plans is not indexed for inflation.
‘The $3million threshold is not currently proposed to be indexed. This means that, over time, more people are likely to be subject to this tax,’ Mr Chapman said.
Those with a self-managed super fund have to submit their return by February 28 if they are self-lodging.
But the deadline is mid-May for those who use a tax agent.
Treasurer Jim Chalmers announced Labor’s proposal in February 2023 but his department didn’t publish a paper until March 28 last year.