In this edition of It depends, partners Scott Hay-Bartlem and Clinton Jackson discuss the proposed Division 296 tax and whether you should withdraw your super ahead of 1 July 2025.
For more information on this topic, check out our newest SMSFs with CGW podcast: Update on proposed tax on super balances over $3 million.
Available on Spotify https://spoti.fi/4jIc1WC, Apple Podcasts https://apple.co/4mXXQQg and the CGW website https://bit.ly/43yZnVb.
Video Transcript
Welcome to this edition of It depends, where we talk about whether you should withdraw your super before 1 July 2025.
Why 1 July 2025?
The government's proposed new tax on super balances over $3 million is proposed to start on 1 July 2025.
What new tax?
So, the government has proposed a new tax on superannuation. It's a tax on part of your earnings where your account balance is over $3 million at the end of a financial year. So, it's actually a formula. The tax is 15% times the proportion of your superannuation balance over 3 million multiplied by earnings. Which is quite a complicated calculation. Now, we've done other It depends and we've done some podcasts on this. So, if you want more information about the new tax, have a look at one of those.
So should I withdraw my super now?
Well, this is It depends. There is no simple answer to this question at the moment. The new $3 million tax is still just a proposed law. We don't know if it's going to stop, and we don't know if the rule is going to change from what we can say and more. All the media saying there's still benefits for keeping money in super, depending on your personal circumstances. So, the most important thing is to probably get advice about how this rule will impact you and your personal affairs. The other thing to note is that once money is taken out of super, it's almost impossible to get it back in, given we have very restrictive contribution caps now and most likely into the future. For more detail on how these laws will impact you, have a look at our other It depends, and we also have a podcast where we talk about this issue as well.
If you have any other questions, please contact a member of our estates team. Thanks for watching this It depends.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.
