Holders of illiquid assets, such as family farms, will need the most help from advisers, as they are set to get slugged with a “cash bill for a non-cash increase”.
The potential impact of the government’s $3 million super tax on farmers has been a hot-button issue since it was first proposed, with the problems of taxing unrealised gains that are tied up in illiquid assets appearing as an obvious issue.
Farmland, in particular, creates some hurdles, with Bryn Evans, financial adviser and partner at Integro Private Wealth, explaining that while some clients that have balances above $3 million are in portfolios holding liquid assets generating “a bit of a high yield”, often this doesn’t include farmers.
“Where we see a few potential issues is around people that have used self-managed funds to hold larger, lumpier, potentially more illiquid, lower-yielding assets, like farmland,” Evans said.
