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Self Managed Super Fund (SMSF) Article
Plans to sidestep Better Super problems

By Tony Negline.

This article may be out of date.

14th June 2006

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The next thirteen months will be difficult for anyone trying to plan for their long-term retirement income needs.  The complications lie in the fact that the government has announced a plan to radically alter the superannuation environment.  Between now and early August the government intends to seek feedback on its plan.

Based on that feedback the government will then refine its policy and then draft some laws.  In reality these laws will not be finalised until the first half of 2007.

The government has said that it does not intend to change its announced policy.  (The obvious question to ask, is why seek feedback if you have decided not to pay too much attention to divergent views?)  Whilst the government has a majority in both Houses of Parliament it can pretty well do whatever it likes.

However as the recent back flip on the sale of the Snowy Hydro has shown if there is sufficient public disquiet about a government policy it will change tack.  To put it plainly there is no certainty that the announced plan to simplify and streamline superannuation will be fully legislated and ready to apply before July 2007.  Already some super fund operators are telling me that they are deeply concerned about their ability to be ready by July 2007.

So what should investors be thinking about between now and July 2007?  There are at least eight issues to consider:

Finally, what benefit is there is splitting super contributions with a spouse?  One argument says that given that after sixty pensions and lump sums will be tax-free there seems little point.  At face value this is a reasonable argument.  Personally I think it is short-sighted.  Anyone who thinks the government will not change the taxation of super benefits over the next forty years is being a little optimistic.  Contribution splitting therefore offers a relatively simple way of minimising the risk that the next suite of super tax changes will not leave you short-changed.

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This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.

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