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The Federal Government has announced significant revisions to the proposed Better Targeted Superannuation Concessions policy, better known (and possibly formerly known) as Division 296 Tax. These updates aim to address concerns raised during public consultation, while continuing to limit tax concessions on large superannuation balances.
The significant changes include:
- Removal of taxation of unrealised capital gains,
- Adding a second threshold of $10 million to the originally proposed $3 million threshold,
- Applying a higher tax rate for funds exceeding the thresholds,
- Allowing indexation to apply for the thresholds.
Another significant change is the proposed start date, which will apply from 1 July 2026.
It is important to note that these substantive changes are only proposals, and full details will not be known until after the draft legislation is issued or bill presented to Parliament.
If you would like to discuss these changes and how it affects your fund, please contact our office.