“Although our impacted clients would prefer this new tax would disappear, it’s not a disaster and clients shouldn’t remove excess amounts from super without careful consideration,” she said.

Ms Heffron said reaching $3 million in superannuation was much harder than it used to be and that many clients will never get there and still gain value from their SMSF.

In her firm’s client base, she said that around 43 per cent have less than $3 million and are over 65 meaning their peak savings years have passed.

“If people choose to take their money out of superannuation, there are important issues to consider including the impact of large withdrawals on exempt current pension income (ECPI), not wasting losses and/or negative earnings, and any tax on death benefits,” she said.

In his opening address at the conference on Wednesday, SMSF Association CEO, Peter Burgess, told delegates they could expect the $3 million cap to become law by 30 June this year.

“The only question that remains is whether the government’s proposal not to index the cap and to tax unrealised capital gains will survive the scrutiny of the Senate crossbench,” he said.

“Although there might not be sufficient crossbench support to block this Bill, we hope that they will support amendments which simplify and improve this tax.”

Mr Burgess added indexation of the $3 million cap could easily be added and the proposed calculation of earnings could be simplified, and the taxation of unrealised capital gains substantially removed, by replacing the proposed complex formula and system of carried forward negative earnings, with a rate which more closely resembles taxable earnings.

“Our modelling shows that if the 90-day bank bill rate was used to calculate earnings, over the medium to long term, not only would taxpayers pay substantially less tax, but their tax liability from one year to the next is much smoother and far less erratic than the government’s proposed approach,” he said.

“Paying less tax was an outcome even if you choose a 15-year period over the past 30 years when there were successive years of negative returns which under the Government’s proposed approach could be carried forward and used to offset the tax in a future year.”