What a new tax on unrealised capital gains could mean for your super.

From 1 July 2025, the Australian Government plans to introduce a new superannuation tax for individuals with balances over $3 million. While that threshold might sound high, the proposed changes are a significant shift—particularly because they include taxing unrealised capital gains.

At Ledgersmith, we're already helping clients unpack what this could mean for their long-term investments. Here's what you need to know.

What's changing?

The proposed legislation, known as Division 296, adds an additional 15% tax on earnings within superannuation accounts that exceed the $3 million threshold. This would bring the total tax on those earnings to 30%, up from 15%.

What makes this controversial is that it applies not just to realised income and gains, but to unrealised gains as well. In other words, if your super investments go up in value, you could be taxed on that increase, even if you haven’t sold the assets.

Why it matters

This is a fundamental change in how superannuation is taxed in Australia. Here’s why it's important:

• It affects long-term planning: You could face tax liabilities without having access to the cash to pay them especially if your super holds assets like property, private equity, or unlisted investments.
• The $3 million cap isn’t indexed: With inflation and natural investment growth, more Australians may be affected over time even if they aren't today.
• It adds complexity to estate and succession planning: For individuals using super to manage intergenerational wealth or succession (such as farmers and business owners), these changes could disrupt long-standing strategies.

What about SMSFs and property?

Self-Managed Super Funds (SMSFs) are particularly exposed. Many SMSFs hold long-term or illiquid assets, like commercial property or farmland. If those assets appreciate in value, trustees could be required to pay tax based on a paper gain without selling the asset or generating cash flow.

This could be especially challenging for SMSF members in or nearing retirement, who may rely on that capital to provide income rather than to generate tax liabilities.

How Ledgersmith can help

We’re here to help you make sense of it all. Whether you’re likely to be affected immediately, or just want to future-proof your retirement strategy, our team can assist with:

• Superannuation structure reviews: Understand whether your balance may breach the threshold and how your assets are exposed.
• Tax impact modelling: See how unrealised gains could affect your annual obligations under the new rules.
• SMSF advice: Tailored guidance for trustees on liquidity, asset allocation, and tax-efficient structuring.
• Estate and succession planning: Update your plans to reflect the impact of these legislative changes.

What should you do now?

While the legislation hasn’t passed yet, now is the time to prepare. If you have, or expect to have, a super balance approaching the $3 million mark, a proactive review is essential.

At Ledgersmith, we combine deep technical expertise with real-world perspective to help our clients adapt to regulatory change with confidence.

Want to know where you stand?
Get in touch with us today for a personalised consultation.