The Federal government’s plan to double the tax rates of the earnings of Australians with superannuation accounts of over $3 million will raise key operational issues including the calculation of unit pricing, leading to increased cost to members. Under the proposal changes, future earnings above the $3 million threshold during the accumulation phase will be taxed at 30 per cent from FY26. However, funds below the $3 million threshold will continue to be taxed at a concessional 15 per cent.
The proposed changes will affect around 80,000 people and generate around $2 billion in tax revenue. “The proposed changes will add more complexity for member administration and also for the Australian Taxation Office as this is a new way to apply tax,” David Braga, principal at consultant Jefferson & Shea Group who advises on custody matters tells Investment Magazine. “This will lead to higher costs to initially upgrade the system and then ongoing maintenance for the upgrade.”
The rest of this article can be found at investmentmagazine.com.au.