Super performance test top of advisers' minds


Since the announcement of the Budget two weeks ago, financial advisers have had the most questions about how the annual superannuation fund performance tests would work, according to Colonial First State (CFS).
CFS said the top three topics regarding the Budget were the performance tests, personal tax cuts, and business tax initiatives.
CFS technical services manager, Craig Day, said: “Some advisers [are] querying whether the annual performance tests could lead to some MySuper funds (and certain choice funds 12 months later) reviewing their investment strategies and potentially leading to increased fund consolidation as funds seek to merge to gain scale, reducing costs”.
On personal tax cuts, Day said advisers wanted to know how the cuts would work for low and middle income individuals.
“It’s important to note that while this group will benefit from both the stage two tax cuts and the retention of the low and middle income tax offset (LMITO), this will only apply for this financial year as the LMITO will cease to apply from 1 July, 2021,” he said.
For business tax incentives advisers were interested in how to invest in their business and get a full deduction for the cost of any depreciable assets such as new software or IT equipment that was used or would have been installed for use by 30 June, 2022.
“The temporary loss carry-back measure will allow an eligible business to access their losses earlier and generate a cash refund to provide a needed cashflow boost,” Day said.
“An eligible business is able to carry back its losses from 2019-20, 2020-21 or 2021-22 to offset previously taxed profits from the 2018-19 year onwards. However, an eligible company with losses in 2019-20 will need to wait until it lodges its tax return for the 2020-21 income year before it can receive the cash refund.”
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.