“If you're under 65, there are limited circumstances that you can withdraw your super and the consequences of withdrawing if you can't are quite severe, and I suspect, probably far worse than the tax would end up being.”

Jackson said he has a lot of clients who are not eligible to withdraw money from their funds, and said those who do qualify have a limited ability to then put it back in.

“For some clients, we've worked for years and years to help them get assets in their funds,” he said.

“We’re getting so many inquiries on this and it's always one of those really difficult areas as a lawyer to provide people good quality advice on a topic when you don't know what the actual laws are going to be.”

He continued that it is important for people to keep in mind that if the legislation is passed in its proposed form, it will start from 1 July 2025, and people who are looking to reduce their super balances to deal with this tax, need to think about strategies, particularly if they have highly volatile assets.

“We're seeing a lot of clients wanting to move those out of super and replace it with cash and things that maybe don't have this tax on unrealised gains,” he said.

“The concern is trying to help people implement those within the time for them to do so and thinking through the implications, particularly if they are as part of those actions, reducing their super balances.”

Hay-Bartlem said as there are still a lot of unknowns regarding the legislation, it is important for people to be cautious before doing anything triggered by the proposed new rules.

“We spent so long having strategies to get money into super and given those potential long-term implications of the decision to withdraw money from super, you've really got to give detailed consideration to what's best for your particular circumstances,” he said.

“Speak to advisers, speak to your accountant, speak to your financial advisers before you take any drastic steps, and compare the tax positions inside versus outside before you take it out.”

Jackson said modelling for different scenarios has shown that there are some circumstances in which leaving money in super would still be more beneficial.

“One thing that people need to be conscious of is the start date of the new tax, if it does come into effect,” he said.

“When the legislation comes in, we will have a clearer picture of what actions people should be taking to deal with that tax.”

Hay-Bartlem continued that because the proposed start date is 1 July 2025, as has been stated by the government, if people decide to withdraw money from their super they may not need to do anything before 30 June 2026.

“You don't have to panic in the next few weeks with the end of the financial year approaching,” he said.

“One of my big concerns is that people panic or don't have time to make an informed decision and they should take that time to make sure they're doing the right thing. It's a bit hard to reverse this once you've done it, so I think with the rapid approach, it's important that people don't panic.”