Meg's Musings – August 2024

I’ve been knee deep in spreadsheets for the last month – yet more modeling on Division 296 tax...when there might be good reasons to take money out of super vs when there won’t be.

My twisted logic is this : if I put a lot of effort into doing this work in preparation for our Super Intensive Day in a couple of weeks, perhaps the universe will mess with my head and the law won’t actually get passed. While I’d love to think that will be the outcome, unfortunately I expect we will see “something” to wind back tax concessions for large super balances. So for now, I’m full steam ahead on how our clients should deal with it.

I can see already that Division 296 is presenting interesting times for the accounting and advice firms we work with. At one extreme, many are advocating for urgent withdrawals from super (either entirely or at least to get down to $3m before the new tax comes into effect). At the other end of the spectrum, there are many (myself included) suggesting a more cautious approach. This will be a business challenge as much as a technical one – how to make sure some of our largest clients are given the right advice at the right time. It will require great collaboration between advisers, the client’s personal accountant and their chosen super expert (often the SMSF team within their firm) as they weigh up different structures for holding wealth in the future.

Certainly withdrawing large amounts that can never be recontributed won’t be the right approach for all clients. Every case is different and there’s no substitute for modeling each client’s individual circumstances but I am definitely finding there are some common themes in all the scenarios I’m comparing.

But if you’re well and truly over Division 296, there are a lot of completely different sessions coming up in our annual training day as well. Lyn, Leigh and Annie are exploring contributions, NALE / NALI, estate planning, special issues associated with withdrawing large assets from super, evaluating the compliance status of quirky investments and more. I can see it’s going to be another jam packed day. Don’t forget that even if you do attend in person, there’s a whole stream available via the virtual day as well that you won’t have seen. If you haven’t registered yet, don’t miss out here. Attendees can enjoy more than 15 hours of CPD for a single admission fee. So, quite apart from the sparkling company, it’s got to be one of the best value SMSF conferences around.