Impact of Super Reforms shows tectonic shift in assets, with taxable SMSF assets almost doubling to $422bn
The latest Class SMSF Benchmark Report has exposed the real impact of Super Reforms on pension assets, with the dual forces of TRIS change and introduction of the $1.6m transfer balance cap forcing assets to move into accumulation and mixed phases.
At June 2018, asset value in accumulation phase was $422bn, a 90% increase from March 2017. The hard hitting impact of this change is that almost 25% of SMSF tax free assets have lost that status.
Kevin Bungard, Class CEO said: “The forced shift of assets out of pension phase has dramatic tax implications for SMSFs. Assuming a modest return on assets for the 2018 financial year, we estimate this shift will result in an increase in the gross tax due on SMSF earnings of nearly 90% from 2017 – a massive impact.”
A silver lining of Super Reform change highlighted by the Report, is that the increased adoption of contribution splitting and recontribution strategies has led to a significant improvement in the gender imbalance in SMSF assets and balances.
Download the Class SMSF Benchmark Report here.