Tax adjustments for high super balances welcome
Tax adjustments on very high superannuation balances should be considered by the community, the Association of Superannuation Funds of Australia (ASFA) believes, following the release of the tax white paper.
According to a report released by ASFA on high superannuation account balances over 200,000 people have super fund balances over $1 million and around 70,000 over $2.5 million.
In terms of self-managed superannuation funds (SMSFs) 24,000 members had balances in excess of $2 million and received $5.2 billion in tax-free income stream payments, or around $216,000. However, 232,000 SMSF balances with less than $1 million received a total of $8.9 billion, or an average of $38,000.
Commenting on ASFA's welcome stance on the issue ASFA chief executive, Pauline Vamos, said "There is growing bipartisan support for changes to the taxation of high balances, and we are pleased to see it being considered as part of the tax discussion paper process."
Vamos said that once a person had built up enough super savings to achieve a fairly high standard of living it would be appropriate to question whether taxpayers should fund incentives to build wealth beyond this point.
"Above this level, the opportunity for people to use the concessionally-taxed super system for estate planning purposes increases," she said.
"It is therefore appropriate to question whether or not the same tax concessions that are applied to lower balances should equally be applied to individuals with very high levels of super."
Vamos said policies the government could implement were lifetime caps on concessional and non-concessional contributions and different tax treatment of high-balance accounts.
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