Assuming the Bills become law, from the 2026 income year onwards, the headline concessional tax rates applying to superannuation earnings will be:
That is, the amendments will reduce the superannuation tax concessions by imposing a tax of 15% on certain "earnings" based on the percentage of the TSB exceeding the $3 million threshold. The tax is imposed directly on the individual and is separate from the tax arrangements of the superannuation fund.
Negative superannuation earnings from balances above $3 million will be carried forward and used to reduce the amount of superannuation earnings subject to the proposed new tax in future income years.
The Bills also amend existing legislation to include provisions relating to the calculation of earnings, withdrawals and contributions, and changes to the definition of TSB.
The above measures are not yet law and are subject to the passage of the legislation.
For more information on the Bills, visit the Australian Government ATO website.
At Trinity Advisory, we specialise in tax accounting, business advisory and coaching services for small businesses located in and around Cairns (116 Mulgrave Road, Parramatta Park QLD 4870) and the Sunshine Coast (2/8 Maroochydore Road, Maroochydore QLD 4558).
Should you need any taxation or accounting advice for your business, get in touch with Trinity Advisory today. Our team of expert Business Accountants, Advisors and Coaches are here to help!
Ref: Treasury website, Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill, and Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023, 30 November 2023