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A Critical Analysis of the Proposed Changes to Superannuation Taxation


This paper discusses four issues in respect of the changes that are to be made to the way that superannuation is to be taxed.

First, the changes dilute the connection between the tax concessions given for saving for retirement and the requirement that the accumulated funds be used for that purpose.

Secondly, the rules that limit the maximum amount that can be accumulated in the tax preferred environment of a superannuation fund are being removed and replaced with rules restricting contributions. To the extent that the former rules introduced equity between taxpayers, this aspect is absent in the new limitations.

Thirdly, claims made about the simplification effect of the new rules are challenged.

Finally, the taxation of employer termination payments will no longer be integrated with superannuation fund payments. This produces a harsher result and alternative treatment is suggested.

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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