Will You be Impacted by the Super Tax?

The Australian Government has announced that the superannuation fund concessional tax rate, applied to accumulation phase earnings, will increase from 15% to 30% for taxpayers with superannuation balances above AU$3 million, from the 2025–26 income year.

The Treasury has now released a factsheet detailing how the proposed measure will operate. Here are some answers to the questions you may have been mulling over.

How will the 30% rate be applied?

The higher 30% rate only applies to the portion of your account balance that exceeds $3 million.

Earnings up to $3 million will continue to be taxed at the 15% concessional rate.

How do I pay this tax?

You will have the choice of either paying the tax yourself or paying it from your superannuation funds.

If you have multiple funds, you will be able to elect the fund from which the tax is paid.

The tax will be separate from your personal income tax liabilities.

Will my pension phase be affected?

The proposed changes only affect taxation of your accumulation phase earnings and will not affect the tax treatment of your pension phase.

Can I still hold more than $3 million in my super accounts?

The proposed measure will not impose a limit on your superannuation balance in the accumulation phase. It only affects the taxation of the earnings on the balance exceeding $3 million.

Is there any draft legislation?

Legislation is still to be drafted and the superannuation industry (and other relevant stakeholders) will be consulted regarding implementation of the measure before it happens.

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