About three years ago, the Labor Party announced a proposal to tax superannuation earnings above $75,000 at 15 per cent.
Although nothing is officially in the pipeline, tax and superannuation experts have analysed comments from shadow treasurer Chris Bowen, which hint at reducing tax concessions for those with superannuation balances over $1.5 million.
For lawyer William Fettes of Melbourne-based firm DBA, he said the possibility of caps on concessions and tax breaks cannot be ruled out.
“We can’t discount that possibility entirely, but it seems that would be a really big undertaking [and] that it would receive quite a lot of pushback from the industry,” he recently said.
Others, like Aaron Dunn of SMSF service provider Smarter SMSF, believe there could be appetite to reduce the transfer balance cap from $1.6 million to $1.5 million.
The transfer balance cap, which applies from 1 July 2017, is a limit on the total amount of superannuation that can be transferred into the retirement phase.
“If you’ve used 100 per cent of your cap, then I would assume therefore that you can carry on under that guise, but again that’s something I could potentially see being impacted if the Labor government gets into power and we have a second federal budget for the year,” said Mr Dunn.