The Federal Government has today announced significant changes to its proposal to raise additional taxes on ‘large’ superannuation balances.
Its prior policy for taxing of large superannuation balances was to levy an additional 15% tax on superannuation balances that exceeded $3 million. This proposal included a ham-fisted attempt to tax unrealised gains and did not include any indexation of the $3 million cap.
In a win for taxpayers, the proposal to tax unrealised gains has been dumped by the Government and indexation has been introduced.
The statement made by the Treasurer stated that they Government “worked through the issues and found a better way”.
So, what is now proposed?
If legislated, these measures would have the following implications for superannuation accounts:
| Thresholds | Tax rate inside superannuation |
| Balances less than $3 million | 15% |
| Balances between $3 million and $10 million | 30% |
| Balances over $10 million | 40% |
Thankfully, both the $3 million and $10 million super balance thresholds will be indexed, in line with the Transfer Balance Cap.
The tax rates outlined above will apply to future realised earnings. Treasury will consult on implementation details including the best approach to the calculation of future realised gains and attribution to individual fund members.
What happens next?
The Government is yet to produce draft legislation for these changes, but it’s aiming to have the changes apply from 1 July 2026.
We will keep you abreast of the changes that the legislation brings.
Contact Pilot
For any enquiries about these changes, please contact Murray Howlett, Tom Howard or your Pilot advisor on (07) 3023 1300.