NTAA looking forward to providing feedback on additional 15% super tax

April 2023

As reported in the March 2023 edition of Voice, the Federal Government announced it will be imposing a 15% additional tax on individuals with a total superannuation balance (‘TSB’) of more than $3 million from 1 July 2025. Further details of this proposal were subsequently released by Treasury, as discussed in an article below. 

Based on the limited details currently available, the NTAA has some concerns about the proposed measure. The NTAA is particularly concerned with the following aspects of the proposal: 

n The proposed measure has created uncertainty around the potential for future changes to the superannuation system, thereby making it difficult for individuals to make decisions about investing in superannuation moving forward. 

n There is currently no indication that the $3 million threshold will be indexed. Without indexation, many more individuals will end up being caught by this measure over time (i.e., more than the 80,000 people that are currently expected to be affected). 

n The proposed method of how ‘earnings’ above $3 million will be calculated means that a proportion of unrealised gains on fund assets above $3 million will be subject to the 15% additional tax. 

Furthermore, using the annual increase of an individual’s TSB as a measurement of ‘earnings’ for these purposes introduces a level of subjectivity to the calculation, as valuations of fund assets (e.g., real property) ultimately determine an individual’s TSB. In turn, this can lead to undue pressure being applied by SMSF trustees to accountants and auditors. 

Treasury has stated that it will consult on the implementation of the measure. At this stage, it is uncertain when that consultation will occur but, once more details are provided on the proposal, the NTAA