The Government has released the consultation paper for ‘better targeted superannuation concessions’ following its announcement last month to double the concessional tax rate for multi-million dollar balances.
With this reform, the headline tax rate for super balances exceeding $3 million would stand at 30 per cent, up from 15 per cent.
It would apply from 2025-26 and affect less than 80,000 people, according to Treasury.
It was expected to bring in approximately $2 billion in additional tax over four years.
Elaborating on the policy, the consultation paper stated the Australian Taxation Office (ATO) would collect the relevant information and calculate the tax liability for an individual’s total superannuation balance (TSB).
Additionally, the proposed approach intended to leverage existing reporting requirements to minimise the regulatory impact on super funds and members though some additional reporting by super funds may be required to support the ATO.
The paper noted SMSFs already reported benefit payments at the member level on an annual basis.
Where additional information was required, it proposed the ATO would receive this information directly from super trustees through changes to the general reporting requirements, specific requests for information by the ATO, or a combination of both.
Super funds which had no members with a TSB greater than $3 million would be unimpacted by this proposal, it stated.
Questions raised for stakeholders in the consultation paper included:
Bodies like Industry Super Australia (ISA), the Australian Institute of Superannuation Trustees (AIST), and Aware Super had voiced its support for the reform while the Association of Superannuation Funds of Australia (ASFA) had stated cautious optimism in reading the “significant” measures.
Submissions to the consultation were open until 17 April, 2023.
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