The Government has completed draft legislation so that consultation can begin on doubling the tax on Superannuation earnings over $3 Mill.
We can now refer to it as Division 296 Tax.
The draft bill will tax earnings on balances over $3 Mill (regardless of pension or accumulation phase) @ 30% instead of the current Superannuation tax rate of 15%.
Earnings, as we mentioned in the last “Trustee,” include any realised and unrealised capital gains growth during the financial year. The additional tax will be an individual taxation matter. This means that reporting of the Superannuation fund will inform the ATO of the individuals’ liability to this additional tax and the assessment will be delivered to the individual.
It will operate very similarly to the Division 293 Tax where the tax liability (payment) can be released from Superannuation.
One change in the draft bill from the original press release is the ability for some payments received by the Superannuation Fund to be excluded from earnings, like marital settlement amounts and insurance payments.
Deceased members will not be subject to the tax if they pass away during the year.
If you are concerned about any aspect of what you have already read about this tax, please contact Supervision for more information. We will be openly discussing the impact and timeframe for this new tax with advisers and direct clients. If you would like Supervision to liaise with your adviser, we are more than happy to arrange support for them on the detailed calculations required.