SMSF members reminded of dividend reform risk

As we head into the final week of the Federal election campaign, the Alliance for a Fairer Retirement System has again reminded consumers that Labor’s franking credit reform may not treat all superannuation fund members equally.

While the Alliance acknowledged there was a legitimate issue with whether franking credits were a withholding credit or a final company tax, the fact they “unfairly” targeted those with self-managed superannuation funds (SMSFs) wasn’t up for debate.

Professor Deborah Ralston, a retirement income expert and spokesperson for the alliance, said that if Labor’s rationale was that franking credits should only be allocated to members of super funds who give rise to a tax liability, then the policy should apply at the individual member level within all funds.

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“Any changes to the tax treatment of franking credits should be applied equally irrespective of their superannuation structure,” she said. “Any proposal that puts the 1.1 million SMSF members at a disadvantage is not only discriminatory but removes an important element of competition from the superannuation system.”

Ralston pointed to the introduction of the $1.6 million transfer balance cap as an example of a policy change that applied to all superannuation fund members, rather than just those in SMSFs.

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