Having been in small business tax for 40 years, Dad and I have seen it all……… especially the politics of tax law changes. With that experience comes this most salient point.
Political promises, and the resultant legislation changes that sometimes accompany these promises, can never actually be acted upon until they become law.
Tax Lawyers in particular always encourage the preparation of materials, updates and seminars for “inevitable” tax changes that may or may not become law.
In our experience, many of these laws are passed with last minute changes and concessions given in politics. This then changes how we advise in public practice.
A very good example of this was the change to Income Distributions of Trusts a few years ago. The Lawyers were espousing and indeed selling trust deed amendments at between $700 and $1000 to bring ALL trusts in line with the “law change”. At the death, the government allowed a definition to be inserted in the law change that effectively meant 98.16% of discretionary trust deeds DID NOT have to spend money on lawyers to alter their deeds.
This is just one example of many where cooling your jets on impending tax law changes is a must.
So it looks like Bill Shorten and his Labor Government may win a federal election in six months time. Bill has said that he’ll ditch tax refunds on Self Managed Super Funds in pension via their Franking Credits.
This may or may not eventuate… What if a number of those big powerful unionists have a little whisper to Billy that their large pensions in CBUS (Construction and Building Industry Super) are going to be badly affected? Perhaps they’ll sway Billy’s mind.
My point is: DO NOT act on tax advice that is going to happen (or even if it is almost certainly going to happen), because what may seem like reality often becomes a furphy at the last minute.
You’ll always get gutsy REAL advice from Paris Financial about what is tax law and NOT what might become law.
