Self-managed superannuation funds (SMSFs) are being "discriminated" against by policy makers who do not understand how tax rules apply in practice, an industry association director said.
"The possibility that the government may try to claw back some of the tax concessions to try to help their budget situation is very topical at the moment," Self-Managed Superannuation Fund Professionals' Association of Australia (SPAA) technical director Peter Burgess told InvestorDaily.
"What's frustrating for us is that coming out of the Cooper Review, the SMSF sector got a big tick and it was considered to be a well-functioning sector but since then, what we've seen is a number of measures that seem to be discriminating against SMSFs."
The trans-Tasman superannuation transfer was an example of how SMSFs were treated separately, as KiwiSaver retirement savings could be rolled from New Zealand funds to Australian funds however, the legislation has excluded SMSFs, he said.
"That's an example where in recent times there's been some discrimination and we just don't understand why," Burgess said.
In addition, there have been speculative reports that SMSFs had an anomaly which allowed no capital gains tax (CGT) to be incurred when SMSF investor moves from the accumulation phase to the pension phase in SMSFs, he said.
"That's really frustrating because they're the same rules that apply to all funds," he said.
"There's no law that says when you move from an accumulation to pension phase that it is a CGT event. Some large super funds choose to do it that way because that's the way their administration systems and processes work."
It demonstrated that there was a lack of understanding of CGT rules by policy makers, therefore it was vital they were aware of how such rules would work in practice, Burgess said.
"It is the same set of rules here, it is not one set of tax rules that apply to SMSFs and another set of tax rules that apply to everyone else.
"It's critically important that everyone understands that, particularly the policy makers."
It is expected that the government will hand down a mid-year Budget shortly, which may or may not include clarification on superannuation changes.
