How do I respond to the proposed Division 296 legislation?
Clients are seeking guidance from us on how to respond to the proposed Division 296 legislation, which imposes an extra 15% tax on earnings for superannuation balances over $3 million.
It is essential that clients engage with their advisors to undertake preliminary modelling to gain clarity on the additional tax liability and the associated cash flow implications for the superannuation fund. There is a common misconception that the amount equals a flat 15% top up tax, which isn’t necessarily the case based on the draft legislation.
The tax modelling prepared for our clients indicates that generally superannuation is still one of the most concessionally taxed vehicles in Australia. Using the tax modelling and based on each individual client circumstances, we talk them through the impact of the tax and the options available to them.
By New South Wales based Family Business Accredited Advisor
Danielle Zavone
Associate Partner at Fordham Group
