The cost of the proposed Division 296 tax bills was not included in this year’s budget but around $9 million has been set aside to work out its application to defined benefit interests held under government funded superannuation schemes.
According to Budget Paper 2, the government will allocate $9.2 million over the four years from 2024-25 to the Commonwealth Superannuation Corporation and the Department of Finance to implement the tax for members under Commonwealth defined benefit superannuation schemes.
An additional $1.1 million per year on an ongoing basis will also be set aside to implement the tax also known as the Better Targeted Superannuation Concessions after the draft bills which are currently before the House of Representatives.
Accurium head of education Mark Ellem said the detailing of the costs of this specific part of the proposed tax reflects it progress through parliament.
“The Division 296 bills are still in draft and the government is still working on revising the defined benefit calculations which will apply,” Ellem told smstrusteenews.
“There were a number of technical deficiencies identified and this funding is to address the complexities involved in those calculations.”
SMSFA Association chief executive Peter Burgess suggested the funding is recognition by the government as to the degree of work that will be required to include the defined benefit interests under the Division 296 tax regime.
“I think they’re allocating a bit of money to determine how to make this tax work,” Burgess pointed out.
“It goes to our point that this new tax is going to add considerable cost to the sector that everyone will eventually have to pay,” he concluded.
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