INTHEBLACK November 2025 - Magazine - Page 40
P O D C AS T
2025
superannuation
changes
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“While major changes are not anticipated, there is growing political
and public pressure for the A$3 million threshold to be indexed
to inflation or wage growth and for alternatives to taxing unrealised
capital gains to be considered.”
RICHARD WEBB, CPA AUSTRALIA
Proposed changes to Australia’s superannuation
system could significantly reshape how
high-balance accounts are taxed.
The introduction of the Division 296 tax adds
an additional 15 per cent tax on earnings from
superannuation balances exceeding A$3 million,
prompting scrutiny from professionals across
the retirement and financial sectors.
In this episode of the With Interest podcast,
CPA Australia’s superannuation lead,
Richard Webb, explores the technical
complexities of the draft legislation, of which
one of the most controversial aspects
is the inclusion of unrealised capital gains
in the tax calculation.
ALTERNATE APPROACHES NEEDED
“The government’s decision to use unrealised
capital gains is largely due to limitations
in the current reporting systems of most
Australian Prudential Regulation
Authority-regulated super funds,” Webb says,
explaining that these funds do not typically
calculate detailed earnings at an individual
member level, “but this is not impossible”.
Unit trusts provide an example of higher
reporting levels that provide an alternative
path, Webb explains, as they already manage
this level of reporting for members.
40 INTHEBLACK November 2025
“This is why many stakeholders, including
CPA Australia, have advocated for alternate
approaches,” Webb says. “CPA Australia
recommends that where funds such
as SMSFs can provide accurate member-level
earnings data, they should be allowed to use
that data instead of relying on the default
method based on changes in total balance.”
AWAITING CLARIFICATION
Further clarification is still required on how
the new tax will apply to defined benefit
superannuation accounts, which do not have
individual balances in the traditional sense.
“Draft regulations have proposed several
valuation methods for these types of funds,
but final details are pending,” notes Webb.
“Importantly, the starting balance for this new
tax calculation will be based on an individual’s
total superannuation balance as at 1 July 2025,
so we need this clarification soon.”
Other organisations have echoed this
sentiment, proposing methods such as deeming
rules or hybrid models that combine actual
earnings with balance-based calculations.
“These alternatives aim to reduce the reliance
on taxing unrealised gains, which can create
liquidity issues and other risks for members,
as well as distort investment behaviour.”
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