NTAA's submission to Treasury regarding the 15% Division 296 tax on TSBs above $3 million

November 2023

As we noted in Your Association last month, the Government released draft legislation to impose tax on individuals with total superannuation balances ('TSBs') of $3 million or more at 30%, rather than 15%.  We believe the exposure draft legislation fails to address a number of key concerns, and we have already made a written submission to Treasury in this regard.  As set out in our submission, these concerns include the following:

• the proposed methodology for calculating an individual's superannuation earnings for an income year will result in the inclusion of unrealised capital gains in an individual's superannuation earnings for the income year;
• the exposure draft legislation does not provide for the $3 million TSB threshold to be indexed; and
• when calculating an individual's superannuation earnings for an income year, the exposure draft legislation requires any superannuation benefit withdrawals made during the year to be added back to the individual's closing TSB for the year.  This has the effect of increasing the individual's superannuation earnings amount for that year, resulting in a higher Division 296 tax liability.

The NTAA has also created an online seminar, explaining the details of this additional tax, which is complimentary to all member registrants/delegates of our 2023 Super Schools seminar, or it can be purchased for $220. Please click here for more information.

The draft legislation is discussed further on page 4 of this edition of Voice, and details of our new seminar ("Preparing Clients for the new $3m Super Cap") are on page 16.

We will keep members informed of developments in relation to this proposed tax.