Broadly, from 1 July 2025, when a member’s Total Superannuation Balance (TSB) exceeds $3 million, an increase in their TSB at the end of the relevant financial year (as adjusted for withdrawals and contributions) will be assessed to them personally as ordinary income.
The increased amount of TSB will be subject to a maximum 15% tax, levied on a proportionate basis to the extent that the member’s TSB exceeds $3 million.
This article offers an assessment of various tax implications surrounding the proposed 15% tax, which is planned to take effect from 1 July 2025. Its main objective is to inform trustees, advisers, and members about these tax considerations to help them make informed decisions regarding the new tax.
- The new tax operates through a three-step process.
- Can an increase in Total Superannuation Balance (TSB) serve as a reliable indicator of earnings?
- The new tax applies to unrealized gains.
- Members will be personally taxed, but they may seek the release of funds from their Superannuation Account to pay the new tax.
- How will negative earnings be handled under the new tax regime?
Source: The new 15% tax on $3M+ member total super balances – a tax analysis – SMSF Adviser
Credits:
Sundar
SMSF Team
