Posted on 9/3/2023
Treasury has entered a period of consultation before the government introduces the legislation into parliament.
As these proposed changes are not yet legislation and are not due to commence until 1 July 2025, there are no changes to your current superannuation taxation. There are still a number of steps required to take place before the proposed changes are legislated.
Perks will continue to provide updates on this proposed change.
Superannuation’s sole purpose is to provide retirement benefits for members or their dependants if a member dies before their retirement.
To assist in growing member benefits, superannuation is tax concessional.
Earnings within superannuation are taxed at a maximum rate of 15% enabling members to achieve higher after-tax returns compared to investing outside of super where earnings are taxed at the individual’s marginal tax rate.
Once a member meets a condition of release, a pension can be commenced up to $1.7m (subject to indexation) allowing for the income supporting the pension to be exempt from taxation.
Any capital gains on assets held within superannuation are eligible for a 1/3 discount if held for more than 12 months, effectively providing a 10% tax on the gain.
The table below shows the tax on income inside superannuation compared to personal income:
Withdrawals from superannuation after the age of 60 are tax-free to members.
The proposed changes do not change the tax inside the superannuation fund.
Kerry possesses a passion for retirement planning and tailoring contribution strategies. Kerry consistently strives to exceed her clients’ expectations and is committed to delivering outstanding service.