4 October 2023

Draft Legislation for tax members with more than $3M in Super released

Draft legislation was released on Tuesday, 3rd October 2023 for the proposed new tax announced in the 2023 budget which will be known as “Division 296 Tax”. While Treasury have invited responses to the draft legislation, major changes are not expected.

Despite heavy lobbying, there has been little movement from the proposed tax as it was first released.

  • There will be no indexation of the $3M threshold meaning more super fund members will be impacted over time.
  • Unrealised capital gains will form part of “earnings” for calculation purposes
  • There will be no refunds when earnings are negative.

It is important to note that not all earnings will be taxed at the higher rate (just part of them) as the additional tax is based on how much of a member’s total superannuation balance is over the $3M threshold.

Furthermore, while the legislation is due to commence on 1 July 2025 the first key date is 30th June 2026. The tax will be levied on individual members who can either elect to pay the tax themselves or request that funds be released from super to cover the payment.

We will be talking to affected members over the coming months but if you have any questions in relation to this measure, please reach out to us.

To read the draft legislation please visit: Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023 | Treasury.gov.au




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