The Federal Government has announced that from 1 July 2025, the Government will reduce the tax concessions available to individuals whose total superannuation balances exceed $3 million at the end of the financial year.
What is known so far
- This measure will commence on 1 July 2025 and apply to the 2025-26 financial year onwards.
- Individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to a tax of 15 per cent on earnings.
- This tax is in addition to any tax their superannuation funds pay on earnings.
- Earnings are calculated using the difference in TSB at the start and end of the financial year, adjusting for withdrawals and contributions, including Unrealised Gains!!!.
- Negative earnings can be carried forward and offset against this tax in future years’ tax liabilities.
- Individuals will have the choice of either paying the tax out-of-pocket or from their superannuation funds.
- Individuals who hold multiple superannuation funds can elect the fund from which the tax is paid.
- This tax will be separate from an individual’s personal income tax, similar to the existing Division 293 tax.
How can I find which of my clients will be affected by this?
You can utilise the Total Super Balance filter on the Entity Workflow screen.
This can be adjusted to locate Funds with members with a TSB in the desired range.