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'I can't explain it. It just isn't fair!'


Taxation concessions for employees to fund their retirement almost exclusively come from the tax preferences given to superannuation funds. Yet small business owners can utilise the tax concessions of superannuation funds on identical terms to employees and at the same time have very generous tax concessions for gains on disposal of their business, which gains are also used for retirement funding.

In addition to that, small business owners are preferred in terms of tax concessions for funding their retirement through their ability to use otherwise dedicated retirement funds in their business, a better ability to share tax concessions with spouses and enhanced tax deferral from a realisation basis of taxation on gains made on disposal of their business.

These differences in taxation of retirement funding breach the principles of horizontal equity and efficiency without any apparent reasonable basis.

These differences are present in the existing system and will persist in the new superannuation taxation environment proposed to commence from July 2007.

Author profile

Gordon Mackenzie CTA
Gordon Mackenzie BSc LLB, LLM, Grad Dip Securities Analysis, CTA, F Fin, CA. Gordon is the convenor of the Master of Tax (Tax and Financial Planning) in the Tax School at UNSW, as well as teaching three superannuation regulation and tax subjects into the Master of Financial Planning run by the Banking and Finance School. He is also Director of the UNSW SMSF Specialisation for CA ANZ and CPA Australia, which has completed 600 candidates in 4 years. Before becoming an academic he was Global Tax Director at AMP Ltd and before that was their Technical Services Director with a staff of 30 professionals Australia wide servicing 3000+ advisers. As a lawyer for AMP Ltd he was responsible for the licensing of some of their licensed subsidiaries such as Hillross ltd - Current at 23 February 2017
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