Australian Government Proposes New Tax on High-Value Super Balances
In a significant move affecting individuals with substantial super funds, the Australian government announced on 3 October 2023, a draft legislation aimed at modifying tax concessions for super balances exceeding $3 million. This proposed change, set to be implemented from 1 July 2025, will apply to assessments issued after 1 July 2026, for the 2025-26 income year.
The crux of the legislation lies in its adjustment of the concessional tax rates associated with super earnings. For individuals whose total super balance (TSB) surpasses the $3 million threshold, the current tax rate of 15% will see an increase to a maximum of 30%. This represents a significant shift in the fiscal landscape for high-net-worth individuals relying on super funds.
As a response to this development, we are thoroughly assessing the potential ramifications of this draft legislation on our Self Managed Super Fund (SMSF) clients. Our commitment to keeping our clients well-informed remains steadfast. We will be reaching out to those who might be impacted by this change, providing detailed insights and guidance on how to effectively navigate this new taxation environment.
Stay tuned for further updates as we continue to monitor the progression of this legislation and its implications for our valued clients.
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