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Our advocacy work: 30% tax on earnings of superannuation balances over $3 million

Our advocacy work: 30% tax on earnings of superannuation balances over $3 million

In February 2023, the Government announced an intention to pursue an increase in the tax rate applying to superannuation earnings on member balances over $3 million.

The new tax is stated to apply from 1 July 2025 but is still subject to legislation being drafted and passed.

Treasury have now released a Consultation Paper seeking public comment on the proposed tax design approach.

The Consultation Paper outlines the preferred approach is to impose a new 15% tax directly on individuals based on the changes to their total superannuation balances during an income year to the extent that their balances exceed $3 million at year end. Adjustments are made for withdrawals and net contributions made during a year.

We made a submission to Treasury confirming that we do not support the current policy design approach, principally by reason that taxing unrealised capital gains is a radical departure from the current system of taxing income in Australia which cannot be supported and due to the lack of indexation of the $3 million threshold, which would significantly broaden the reach of the new tax beyond its stated scope over time.

You can read our submission below.

You can find out more about our advocacy work on the website here.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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