Here is the first piece in our series.

Do you expect as many changes in the SMSF landscape in 2024 as we saw in 2023?

Grant Abbott, LightYear Group chair, director, and founder

As we saw in 2023, I think the big one is going to be preparing for the $3 million wealth tax that applies from 1 July 2024. In 2023, everyone was lobbying and talking about it, but not not doing much. I think we are going to see a lot of development around this with estate planning and wills.

One of the things I’ve noticed is that Millennials and Gen Z are more inclined to do their own thing and we’ve been dealing with a lot of FIFO workers setting up their self-managed superannuation funds.

I think that it’s really important for accounts and SMSF advisers to get out in the space and start educating the younger crew as to how beneficial superannuation is for them.

Fatuma Akalo, financial adviser at Wattle Partners

To be honest, there was only one major change, being the imposition of a $3 million cap on super balances. The majority of the other changes, including minimum pensions, contributions and balance caps apply to all super accounts, not just SMSFs.

But there is little doubt the government will remain focused on ‘lost’ revenue, particularly for larger balances which tend to be found in SMSFs. Moreso, it wouldn’t surprise me if the government responds to much higher income production via another play on franking or something similar.

Tim Miller, technical and education manager, Smarter SMSF

The past 12 months have been dominated by the likely closing of a chapter that was opened in 2018 with the amendments to the NALE provisions, introducing a concept that will go some way towards formulating future policy with the introduction of the Objective of Super and the big ticket item of the introduction of Division 296 tax.

So, while it was a noisy year, many of the actual changes that took effect in 2023 were planning and processing changes as we saw the downsizer age reduce to 55, minimum pensions return to their normal percentage, age pension age increase to 67, those who turned 59 on or after 1 July 2023 having to wait until 60 to hit preservation age and of course all SMSFs moving to quarterly TBAR.

But for me, the biggest event to impact SMSFs in 2023 was the indexation of the transfer balance cap from $1.7 million to $1.9 million as this impacted contribution and pension strategies.

Of course, there’s no doubt that the initial announcement and subsequent Bill introduction for Division 296 was significant but in itself, it is likely to have a greater impact in the latter stages of the 2023–24 financial year on the assumption it proceeds following the Senate review and probably more pronounced impact on 2024–25 when SMSFs start to consider and implement strategies to combat tax liabilities should they need to.

Shelley Banton, head of education, ASF Audits

The SMSF industry should be prepared to expect the unexpected in 2024. The government has demonstrated it is targeting SMSFs in a way we have never seen previously, and we should be anticipating that more changes will come.

Aaron Dunn, CEO, Smarter SMSF

I think the reality is we will see further change and much of that is because we don’t as yet have finalised legislation naturally on the division 296 laws.

Whilst we are expecting the NALI/E laws to be resolved as we move into 2024, we don’t have Royal Assent on those items. But the other interesting one is naturally, the fact that we would see Labor look to finalise their superannuation objective Bill and that is naturally going to provide them with an opportunity to look at whether there are any other further changes or tightening of policy.

In particular, when you look at the definition, or the stated objective, and naturally looking at the focus on retirement, looking at the focus of preserving savings for retirement, we have the retirement review that is being undertaken as well.

So, a lot of these things will be interesting to follow as we move into the federal budget and see again whether Labor perceives there to be anything of merit that would warrant that change. They have previously stated, of course, that they wouldn’t expect to make any further changes in this time of government in respect to superannuation but quite clearly, as the objective rolls in, it does naturally provide them with a framework to look at those sorts of issues.

Michael Hallinan, special counsel, SUPERCentral

There have been significantly more changes both in volume and impact. Next year will see the enactment of the Superannuation Objectives legislation; the enactment (first tranche at least) of the “Delivering Better Financial Outcomes” series of legislation and finally, the enactment of the “Better Targeted Superannuation Concessions” (Division 296 Tax).

The Objectives legislation can be used to justify any negative change to superannuation – based on fairness or sustainability (or both). The Delivering Better Financial Outcomes legislation may reduce the lot of financial advisers in recommending and dealing with SMSFs. Also, it may encourage the conversion of industry funds from product manufacturers to be financial advisory entities. Finally, the Division 296 legislation will encourage the movement of large real estate (typically primary production property) out of super to avoid the tax on unrealised gains.