update: tax on super balances above $3m

In a very quick turnaround from announcement to draft legislation, Treasury has released the exposure draft legislation for consultation to enact the Government’s intention to impose a 30% tax on future superannuation fund earnings where the member’s total superannuation balance is above $3m.

The draft legislation confirms the Government’s intention to:

• Impose the tax on member accounts with superannuation balances above $3 million from 1 July 2025 (not indexed); and

• Apply the additional 15% tax to ‘unrealised gains’. This will mean that a tax liability will arise if the value of the assets goes up

Currently, all fund income is taxed at either 15%, or 10% for capital assets that have been held by the fund for more than 12 months. Unrealised gains, that is gains that are made because of changes in value, gains on paper, are not currently taxed – only when the gain is realised on sale or disposal of the asset.

If enacted, the legislation would mean that those impacted, could be paying tax on gains in value but without the cash from a sale to support the tax payment.