Under the current accounting and umbrella trust setup holding both Accumulation and Retirement Income assets in the one trust fund, the capital gains is never if ever realised as the funds are perpetual in nature and so no tax is paid to the government but deferred indefinitely. The managers say that the unit price system used the member’s amount is adjusted for the tax. However, the investment managers take their clip on this deferred capital gains tax liability. At a very rough estimate the deferred capital gains could amount to about 3% of the total held in the Superannuation environment. The only way the government can realise this deferred tax liability is to go to an annual accrual basis of taxation. Further, this would make the valuation of illiquid assets more realistic.