This Factsheet issued by the Government provides some detailed examples.
The current announcement is only a proposal at this stage. The proposal firstly needs to go through the rigor of targeted consultation, plus a range of official parliamentary processes before it makes it into legislation. If passed into law, it will not come into effect until July 2025.
As a super fund member, should I worry?
Given the relatively high balance threshold before the higher tax rate kicks in, even if this legislation does pass, superannuation will continue to be one of the most tax-effective structures for retirement investment savings.
Further, no proposed changes have been made to the tax-free status of eligible superannuation withdrawals from age 60, or the ability to withdraw your funds from super once you have triggered a condition of release. This provides opportunity for those clients where the threshold becomes a concern to implement smart super strategy planning.
A number of proactive planning strategies may become even more important such as super-splitting, recontribution strategies or withdrawing funds from super to stay under the proposed threshold with the view to investing in other non-super tax-efficient structures.
If you would like to take a more proactive approach to your superannuation investment and wealth planning, we offer an initial complementary whiteboard strategy session to explore your options and value creation potential.
Contact one of our wealth management experts on: email@example.com or 03 9894 2500.