Proposed Change to Australian Super Tax Threshold Could Affect Over 1.8 Million
New modelling suggests that a proposal to lower the Division 296 tax threshold from A$3 million to A$2 million could affect over 1.8 million Australians, with implications for younger superannuation members and pre-retirees alike.
As reported by SMSF Adviser, analysis conducted using ASIC’s Moneysmart calculator and ATO data indicates that:
- Around 47,860 Australians aged 55–59 would face a 30% total tax rate on super earnings and unrealised gains
- Close to 800,000 individuals under 30 could be impacted over their working lives.
The modelling, sourced from an anonymous industry group, highlights how changes to fund values — such as a 7.5% annual return — could quickly push account holders above the proposed threshold, even if their balance was initially below A$2 million.
Peter Burgess, CEO of the SMSF Association, noted that while the association had not verified the modelling, the figures reflect the scope of impact such a policy change could have. He stated that the association’s position remains unchanged: it does not support the Division 296 tax in its current form and would continue to oppose a reduction in the threshold.
The proposed amendment has been raised by the Australian Greens as a condition for supporting the Better Targeted Superannuation Bill in the Senate. With the possibility of a minority Labor government emerging after the upcoming federal election, the stance of crossbench parties could prove critical.
These developments are likely to attract attention from New Zealand-based trustees, advisers and dual-residency clients with interests in Australian superannuation, particularly where higher balances and long-term tax exposure are concerned.
New 2025 Edition of ‘Doing Business in New Zealand’ now available
Source article: SMSF Adviser – “Lowering Div 296 to $2m will impact 1.8m: analysis”