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.
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?
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.
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.