Tax Alert - Changes to double concessional tax rate on earnings from super balances over $3 million

Blog Layout

Tax Alert - Changes to double concessional tax rate on earnings from super balances over $3 million

Lowe Lippmann Chartered Accountants

Changes to double concessional tax rate on earnings from super balances over $3 million

The Government has announced plans to increase the concessional tax rate from 15% to 30% on superannuation earnings from superannuation fund balances over $3 million from 1 July 2025.

The changes are planned to begin on 1 July 2025, just after the next federal election. Treasurer Jim Chalmers said the timing of the introduction will be “allowing Australians to go to the polls on the issue”.

This announcement does not impose a limit on the size of superannuation account balances in the accumulation phase, and only applies to future earnings, with the changes not being retrospective before 1 July 2025.

It was confirmed that there are no current plans to annually index the $3 million threshold chosen for this announcement, meaning the level at which the higher tax rate of 30% will be levied would not rise over time.

It is relevant to note this announcement is likely to impact less than 1% of all superannuation fund balances in Australia, which is approximately 80,000 individuals. Furthermore, the fundamentals of the superannuation system are not being altered in any other way.

We note that this proposed change potentially marks a seismic shift in superannuation for some of our clients. However, there is a lot of water to go under the bridge between now and the proposed commencement date of this legislation.

We will continue to keep you informed of any major developments as they occur.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

Liability limited by a scheme approved under Professional Standards LegislationNew Paragraph

< Older Post

Newer Post >

Practice Update – April 2025

April 1, 2025

ATO's new focus for small business The ATO is currently focusing on the following 'specific risk areas', where it is concerned "small businesses are getting it wrong": Contractors omitting income — with a focus on data matching to ensure all income is reported. Quarterly to monthly BAS reporting for GST purposes — The ATO will move around 3,500 small businesses with a history of non-compliance to monthly reporting from 1 April 2025. Small business boost claims — with a focus on encouraging self-amendments to correct errors and omissions. The ATO will also continue its focus on non-commercial business losses, small business capital gains tax ( CGT ) concessions, business income that is not personal income, incorrect claims for 'small business boosts', GST registration and income of taxi, limousine and ride-sourcing services.

Tax Alert - Bill passed for Instant Asset Write-Off of $20,000 for 2024-25

March 27, 2025

Bill passed for Instant Asset Write-Off of $20,000 for 2024-25 There was no mention of the extension of the instant asset write-off ( IAWO ) within the Federal Budget delivered last Tuesday night, leaving many small business taxpayers frustrated and uncertain. However, the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2025 has now been passed through the Parliament, and it included the extension of the IAWO threshold of $20,000 for assets first used or installed ready for use between 1 July 2024 and 30 June 2025. After the Bill has now been passed by both the House of Representatives and the Senate, it now simply waits to receive Royal assent.