The Australian Government has updated its plan to tax earnings on superannuation balances above AU$3 million. These changes aim to improve fairness, simplify compliance, and make the policy practical for funds and members.
The revised framework introduces streamlined assessments of additional tax liabilities and new thresholds to better target high-balance accounts.
Key Updates Under the Revised Proposal
1. Shift to Realised Earnings
Tax will now apply only to realised earnings rather than unrealised gains. This ensures:
- Fairer taxation
- Greater clarity
- Alignment with standard tax principles
2. Commencement Date: 1 July 2026
The start date has been pushed back, allowing:
- More time for industry consultation
- Smooth implementation across super funds
3. Two-Tier Threshold Structure
- Balances above AU$3 million: concessional tax capped at 30%
- Balances above AU$10 million: concessional tax rises to 40%
4. Indexation of Thresholds
Both thresholds will now be indexed to prevent bracket creep and maintain fairness relative to inflation.
Why These Changes Matter
The refinements address key concerns:
- More equitable tax outcomes
- Reduced administrative burden
- Alignment with realised economic gains
- Fairer treatment for illiquid assets or volatile returns
Who Will Be Affected?
- Individuals with super balances above AU$3 million
- Greatest impact for balances above AU$10 million
Most Australians, including the majority of workers and retirees, will not be affected.
What This Means for Members
High-balance super members should:
- Review long-term retirement strategies
- Assess asset mix, liquidity, and tax implications
- Understand realised earnings calculations
- Prepare for additional tax obligations from 1 July 2026
Professional advice is recommended to navigate these changes effectively.
How BOA & Co. Can Help
BOA & Co. assists high-net-worth individuals, trustees, and businesses with:
- Superannuation tax planning and compliance
- Advisory on high-balance super strategies
- Retirement and wealth structuring
- Tax modelling for the 2026 framework
Our Sydney-based team ensures clients stay informed and prepared.
The Bottom Line
The Government’s revised plan introduces a fairer, more transparent approach to taxing high super balances:
- Realised earnings basis
- Start date: 1 July 2026
- Two-tier system
- Indexed thresholds
Individuals with large super balances should review strategies now to prepare for 2026.
Contact BOA & Co. Chartered Accountants
📞 Expert guidance on superannuation tax, wealth planning, and regulatory changes
📧 [email protected]
🌐 www.boanco.com.au
📍 Sydney, NSW
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