March 3, 2023
The Government has announced that from 2025‑26 it is reducing the tax concessions available to individuals whose total superannuation balances exceed $3 million. Individuals with balances over this threshold would be subject to an additional tax of 15% on the earnings on any balance that exceeds the $3 million threshold.
The tax only applies to the proportion of earnings corresponding to balances above $3 million. This means that earnings corresponding to funds below $3 million will continue to be taxed at 15 per cent or less. The amendment is intended to apply to future earnings and not be retrospective.
Individuals will have the choice of either paying the tax personally or from their superannuation funds. Individuals who hold multiple superannuation funds can elect the fund from which the tax is paid.
The Government believes 80,000 people are expected to be impacted by the measure.
The announcement doesn’t propose any changes to the transfer balance cap or the amount that a member can have in the tax-free retirement phase.
We understand the detail of these changes are still under consultation with the superannuation industry and relevant stakeholders. Should you wish to discuss the latest developments please don’t hesitate to contact us.