The Federal Government has released a tax discussion paper which states that the existing tax concessions for high income taxpayers may be reformed.
The concern centres around the flat rate of tax for superannuation funds, that is, the same tax rates apply regardless of the wealth or the income of the member.
All members in the accumulation stage of their superannuation fund pay 15% tax on income and 10% tax on capital gains, where the asset was held for longer than 12 months.
All superannuation funds in the pension stage pay nil income tax and nil capital gains tax.
This flat rate of tax means that high income earners receive a greater relative tax benefit than low-income taxpayers.
Accordingly, this discussion paper is reviewing the inequity in the superannuation system.
There is no doubt than superannuation is an extremely effective investment structure.
Should you require assistance or how your investments and superannuation are structured, please contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.