The Budget Repair Levy doesn’t just apply to the highest marginal tax rate, AMP SMSF’s Peter Burgess told SMSF Adviser, it also applies to a number of other tax rates which are based on the highest marginal tax.
“For example, the rate that applies to non-complying super funds will increase from 45 per cent to 47 per cent and the rate that applies to excess non-concessional contributions and non-arm’s length income, will also increase from 45 to 47 [per cent],” Mr Burgess said.
“[Advisers] need to ensure these increased tax rates are factored into their tax calculations and strategies from 1 July 2014,” he added.
The Departing Australia Superannuation Tax Payments (DASP) will also be affected, said the SMSF Academy’s managing director Aaron Dunn, with two rates increasing to incorporate the levy.
DASP payments from a taxed super fund will be subject to a tax rate of 38 per cent during the period that a levy applies, Mr Dunn said, and DASP payments from an untaxed super fund will be subject to a rate of 47 per cent.