While super tax concessions for the wealthy were in the government’s firing line last night, one change in particular was less drastic than originally thought.
Last night, the government proposed requiring those with combined incomes and superannuation contributions greater than $250,000 to pay 30 per cent tax on their concessional contributions, up from the current 15 per cent.
This extends the current treatment of people with combined incomes and superannuation contributions over $300,000.
“These individuals will still have significant incentives to save for their retirement. This change will only affect around one per cent of superannuation fund members,” the government said.
According to Accurium's post-budget report, the existing administration process for levying this tax will remain unchanged, but "a larger number of people will be drawn into it".
"Individuals will still have the ability to pay the additional 15 per cent tax liability from their superannuation fund if they choose to," Accurium's report stated.
While this is a notable cut for high-income earners, it was originally thought the income threshold would be cut from $300,000 to $180,000.
“We were expecting a lowering of the Div 293 threshold and we are pleased that it is being restricted to $250,000,” the SMSF Association’s head of policy, Jordan George, told SMSF Adviser.
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