The federal election results have come unexpected after weeks of opinion polling indicated a victory for the Labor party. It was a “miracle” win for Scott Morrison and a spectacular failure on opinion polling.
Along with the Liberal win is the continuation of the following policies:
- Cash refunds for franking credit to continue for shareholders
- Rolling 5-year catch-up concessional contribution cap
- SMSF LBRAs (Limited Recourse Borrowing Arrangements) to continue (see below)
- Maintaining the removal of the 10% rule for personal super contributions
- Continued negative gearing and Capital Gains Tax (CGT) arrangements
It’s also expected that Liberals will push for the policies proposed as follows:
- Increasing the number of SMSF members from 4 to 6;
- To allow those aged 65 and 66 to make voluntary superannuation contributions without meeting the current work test;
- Increasing the age limit for spousal contributions from 69 to 74. At present, people aged 70 and over can’t receive contributions made by someone else on their behalf.
- Exempt Current Pension Income (ECPI) changes: administrative changes to reduce complexity in the management of super funds.
- For SMSFs that have related party loans or if a member has an unrestricted non-preserved balance, then the SMSF borrowing amount will be counted against the total super balance.
Tax-cuts as originally proposed by both parties should push through legislation to take effect from 1 July 2019.
It will be interesting to see if the first homeowners 5% deposit policy which was announced last minute by the Liberal party will pull through.
With Tony Abbott out of the way, it seems Scott Morrison has a clean slate to push his government ahead.
We remain engaged with policy updates and will be in contact with our clients should they need to take action.
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Disclaimer: This post has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions. Align Financial | Financial Planner Northern Beaches | Servicing North Narrabeen, Narrabeen, Mona Vale, Elanora Heights, Newport, Avalon, Palm Beach | Enquire with us online.