30% Tax on Super Earnings Above $3M

30% tax on super earnings above m

Heany Business Group brings to your attention a significant development in taxation affecting superannuation earnings. The Treasury has unveiled preliminary legislation to implement the Government’s proposal to raise the tax rate on superannuation balances exceeding $3 million from 15% to 30%, effective July 1, 2025. This marks a crucial progression towards the legislation’s formal introduction to Parliament.

Notably, the draft legislation closely mirrors the initial government announcement. The proposed calculation method is designed to encompass the growth in Total Super Balance (TSB) throughout the fiscal year, accommodating contributions, including insurance proceeds, and withdrawals. This inclusive approach covers both realised and unrealised gains, permitting the carry-forward of negative earnings to offset against future years.

The Australian Taxation Office (ATO) will be responsible for executing the tax on earnings calculation. The first assessment of TSBs exceeding $3 million is scheduled for June 30, 2026, with affected individuals anticipating the issuance of their initial notice of assessment in the 2026-27 financial year.

For individuals with superannuation balances approaching or surpassing $3 million, strategic planning is paramount. The implications for your personal circumstances are diverse, as there is no universal strategy. It is crucial to assess your unique situation and make informed decisions. Despite the augmented tax rate, superannuation remains a tax-efficient vehicle, reinforcing the need for personalised planning.

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Heaney Business Group

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