Speaking to Accountants Daily, Thomson Reuters senior tax writer Stuart Jones said accountants and those in the superannuation industry will continue to be facing the need to better comprehend the changes despite a year spent bedding down the reforms.
The reforms, which kicked in on 1 July 2017, included the $1.6-million pension cap and the introduction of the transitional CGT relief, amongst other restrictions.
“Most accountants have had their head down to try and bed down some of those aspects especially that CGT transitional release. Now that they've got to that stage, they get to look forward to what's next for them and their clients,” said Mr Jones.
“A large part will still be navigating those additional layers of complexity that have come from the reforms especially for some of the more valuable strategies for their clients and understanding how those reforms sit within the broader super network.
“It will be especially challenging for people with higher net wealth clients, you're still navigating those reduced contribution caps and some of the other restrictions around the pension transfer balance cap and that's largely revolving around trying to get as much money as possible into that concessionally taxed super environment and then managing that going forward.”
Mr Jones believes professionals will need to better understand the interconnected details of each change and how they sit with the broader super framework to formulate strategies for their clients.
“The hardest part in understanding the implications is knowing how most of the changes are interconnected between the SIS regulations and also the tax implications so I think it's still a matter of people being tripped up not being aware of the other provisions,” he said.
“They tend to get focused on single issues but because there are so many of these other provisions, it usually means if the tax office or the regulators take issue with something you've done, then there's so many different things they look at to shut it down.
“It is more of being aware of all of the changes, and we still think this is the perfect timing to get on top of it, because we've had the benefit of the first full year and we still have yet to learn some of the lessons along the way, because we've had to go through a lot of these provisions in a bit more intricate detail, and some of the implications become a little bit more obvious.”
However, Mr Jones believes there are positive outcomes from the reforms, including a forced take on better planning processes and the opportunity to engage clients and increase their financial literacy.
“Some of the most valuable strategies that we have around utilising the concessional tax treatments for our long term savings objectives just mean it now has become a little bit more complex, but at the same time that complexity means that people will go through a more detailed planning process which hopefully should put them in a better place,” said Mr Jones.
“The additional complexity isn't necessarily a bad thing, it's just forcing us to turn our mind to it and be a bit more methodical about how we go about making the most of those concessions.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.