Removing the ability for a Self-Managed Superannuation Fund (SMSF) to undertake off market share transfers, as outlined in the Government’s response to Stronger Super Reforms handed down yesterday, unfairly disadvantages SMSFs, according to the SMSF Academy.
SMSFs were one part of a broader review in the governance, efficiency, structure and operation of Australia’s Superannuation System.
“The Government has endorsed, without any compelling data to support its decision, and despite strong opposition from the appointed SMSF Working Group, a recommendation from the Cooper Review to remove an SMSF’s ability to receive in-specie contributions or in-specie transfers of listed shares,” said the SMSF Academy Managing Director, Aaron Dunn.
The recommendation made by the Cooper Review suggested: ‘… where an underlying market exists, all acquisitions and disposal of assets between SMSFs and related parties must be conducted through that market.’
“The outcome is disappointing given that the SMSF Working Group, along with several professional bodies, including SPAA, put forward a framework which addressed concerns raised in relation to the potential abuse of contribution caps and capital gains tax, and would allow off-market transfers to continue,” Mr Dunn said.
Mr Dunn said a statistical summary into SMSFs had debunked many of the myths around SMSFs but the SMSF Annual Return had only recently captured in-specie transfer information.
“Unfortunately, I think the Government’s decision has been based on hear-say rather than on sound statistical evidence,” he said. “I’m still unaware of any compelling data that justified this decision.”
Mr Dunn said a more sensible approach would be to adopt a set of industry based guidelines to legislate on the issue for all superannuation funds to ensure that there is no manipulation of contribution caps or capital gains tax.
“We will continue to lobby the Government on this issue to ensure that there is an even playing field for SMSFs and listed shares,” he said.