In light of the election outcome, the Federal government is indicating that it will press on with the proposed changes, so that advisors will again need to turn their minds to potential implications.
This is a challenge when we don’t have certainty about the content of any reintroduced bill to Parliament nor what amendments might be sought in the Senate. In the short term, we suggest:
- Refresh your understanding of what the last bill proposed to do. Our earlier articles (What are the estate planning implications of the proposed “$3m super tax”? Published in January 2024 and Superannuation Tax Increase – Should I pull my money out? Published in February 2023) dealt with the operation of the proposed law prior to the bill lapsing before the recent election.
- Be aware that the new law may not be the same so keep up to date the with the progress of the bill.
- Consider all implications before taking action and recognise that we are still operating under uncertainty. Apart from the number crunching exercise to be performed, there are other potential implications to be considered including:
- Impact on the Will and powers of attorney of the member who has withdrawn super – if super is directed specifically to a person, the withdrawal will change its nature and the existing documents may not operate as intended;
- Asset protection implications – assets in a member’s personal name will have increased exposure to bankruptcy risk and estate challenge.
Longer term, if the legislation is passed, it will also require a rethink of the benefits of reversionary pensions, as the impact on the recipients total super balance could increase the impact of the proposed new tax.
How we can help
Stay informed about the legislative updates and contact the Estate Planning team for expert advice and guidance in navigating the evolving landscape of superannuation.
Contact us
Please contact us for more detailed and tailored help.
Subscribe to our email updates and receive our articles directly in your inbox.