Eureka Report correspondence
"Retrospective" measures?
Many financial commentators seem to think that 'retrospective' is a synonym for 'not grandfathered forever'. It is not.
If income tax rates were to be increased as from 1 July next, that would not be a retrospective change, even though the increased tax rate might apply to those in receipt of wages or other income under existing arrangements.
Similarly, a change in the tax rate on TTR pensions from zero to 15% as from a future date is prospective and not retrospective.
If the new tax rate were to be backdated to the time of the Howard-Costello reforms and tax liability reassessed, that would be retrospective.
The limiting of tax-free pension funds to $1.6m from a future date is likewise prospective. It seeks to deal with a perceived rort or inequity by imposing new requirements for the future. It does not deem the new arrangements and tax regime to apply, retrospectively, to any past fund income.
- John
The proposed changes for couples
With planned changes to Superannuation I have two questionsin relation Self Managed funds
1. Where one member has in excess of $1.6 is aged under 75 and the other over 75 with little in superannuation, is there any way to make changes to even out the balances?
2. Is there any provision for a married couple to combine super funds thus having $3.2 maximum?
- Beryl
Editor's note: Our recorded webcast on budget 2016 might be useful for your question. It it Doug Turek, Bob Gottliebsen and James Kirby discuss how they understand the super changes regarding the $1.6 million transfer cap as applying to each individual, and discussing couple's approaches to the changes.
You can view the webcast on demand by clicking on this link: Budget 2016 webcast.
Lost trust
All of this budget nonsense just highlights one thing to me - you can't trust any of them. Hardly going to be affected by the budget changes but honestly as an investor I just wonder if things can be made retrospective how much else will change in the long run. Eureka subscribers should band together to protest all retrospective tax proposals - we've planned ahead and done the right thing and we should be able to know things will be grandfathered at the very least.
- Matthew