smh.com.au
15% Tax on Unrealised Super Gains Over \$3 Million: Implications and Calculation
A 15% tax on unrealised superannuation gains over \$3 million per member will take effect from July 1, 2026, impacting those whose balances exceed this threshold at any time after June 30, 2026, even with subsequent withdrawals; the calculation considers earnings exceeding the threshold and a proportion of the balance above \$3 million at year-end, with a mechanism preventing tax avoidance through last-minute withdrawals.
- What are the potential long-term consequences of this tax on individual investment strategies and the broader superannuation system?
- Future implications include potential adjustments to investment strategies to minimize exposure to the tax. Individuals may shift their portfolios to less volatile assets or adopt strategies designed to maintain balances below the threshold. This tax could also indirectly impact the overall superannuation landscape, influencing investment decisions and retirement planning.
- What are the precise implications of the proposed 15% tax on unrealised superannuation gains for individuals whose balances temporarily exceed \$3 million after June 30, 2026?
- The proposed 15% tax on unrealised superannuation gains over \$3 million per member will apply if your balance exceeds this threshold at any point after June 30, 2026, even if you subsequently reduce it. The tax is calculated on earnings exceeding the threshold, not just the year-end balance. This means that withdrawals made to reduce your balance below \$3 million before June 30, 2027, may not entirely eliminate your tax liability.
- How does the 'adding back' mechanism in the tax calculation affect taxpayers who make withdrawals to reduce their superannuation balances below \$3 million before the tax year ends?
- The tax calculation involves three components: a 15% tax rate, earnings above \$3 million, and a proportion representing the percentage of your super balance above \$3 million at June 30. The 'adding back' mechanism prevents tax avoidance via last-minute withdrawals by including those withdrawals in the earnings calculation. Therefore, even temporary exceedances of the \$3 million threshold can trigger a tax liability.
Cognitive Concepts
Framing Bias
The framing emphasizes the complexities and potential pitfalls of the proposed tax, potentially influencing readers to perceive it negatively. The use of examples illustrating potential tax burdens further reinforces this perspective.
Language Bias
The language used is generally neutral and informative, although the description of the tax as "incredibly complex" might be considered somewhat loaded. However, this is likely due to the inherent complexity of the issue and not intentional bias.
Bias by Omission
The provided text focuses on specific aspects of superannuation tax and does not offer a complete analysis of all potential biases. It primarily addresses reader questions and concerns, potentially omitting broader contextual information or alternative viewpoints on the proposed tax.
False Dichotomy
The article presents a clear dichotomy between those whose superannuation balances exceed \$3 million and those who do not, potentially overlooking the nuanced situations of individuals nearing this threshold or experiencing fluctuating balances.
Sustainable Development Goals
The article discusses a proposed 15% tax on unrealised superannuation gains exceeding \$3 million. This measure aims to reduce wealth inequality by targeting high-value superannuation accounts. While the complexity of the tax calculation is noted, the intent is to redistribute wealth and address the imbalance between those with substantial superannuation and those with less.