The $3m super cap tax passed the lower house late last week, after an overwhelming rejection of proposed amendment to the Division 296 tax.
This amendment was put forward by an independent MP to include indexation of the $3m threshold. While rejected, the bill still needs to contend with the Senate where government numbers are more reliant on others to get the bill passed as constructed.
There continues to be significant noise by the opposition and several independent senators regarding aspects of the bill, including lack of indexation and the inclusion of unrealised gains in the earnings calculation. It appears that compromise, on at least one of these aspects, may result in the bill otherwise being passed.
TAG Financial Services would caution against any movements to avoid this tax at this time (eg. withdrawing funds from super) until we have legislative certainty. In the meantime, we should be educating clients to be ready to contend with this new tax, which will become applicable for the 2025/26 financial year, if legislated.
The looming federal election (which must happen before 30 June 2025) also must be contended with – as any bills not legislated will be binned, and a change in government will see this measure scrapped altogether.
You can read our previous blogs on this measure here:
Any Questions?
If you have any further questions don’t hesitate to reach out to us! Email us at super@tagfinancial.com.au or give us a call on 03 9886 0800.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2024. Please do not reproduce without the expressed written consent of the author.