Key Points:

Superannuation tax changes are increasing estate planning complexity
Growing trend for early intergenerational wealth transfer
Strong results from ASX:CBA and ASX:ANZ, but dividend outlook cautious
Execution concerns keep Van de Pol on the sidelines for ASX:CSL

John Van de Pol from Morgans comments on the so-called ‘inheritance tax by stealth’, highlighting its impacts on families, homes, and superannuation. Van de Pol outlines that superannuation balances often have taxable and tax-free components. If superannuation passes to adult children (non-dependent beneficiaries), the taxable portion can face a 17% tax, which, on a $2 million balance, could mean a significant liability for heirs. The introduction of Div 296 further increases the effective tax on larger balances, potentially acting as another wealth tax and prompting many to rethink their estate strategies.

He observes a growing trend among clients to transfer wealth to children whilst still alive, aiming to mitigate future tax liabilities from these incremental government changes. Van de Pol says this shift is altering how families manage intergenerational wealth transfer, especially after one spouse passes, and suggests tailored strategies depending on individual circumstances.

Turning to company results, Van de Pol notes strong performances from banks, specifically Commonwealth Bank of Australia (ASX:CBA) and ANZ Group (ASX:ANZ), due to volume growth and disciplined competition. Despite CBA’s standout results, he remains cautious about future dividend growth. On healthcare giant CSL Limited (ASX:CSL), Van de Pol expresses concern about execution and opts to wait for quality improvement before recommending a move.

"Inheritance tax by stealth" | the advisory