Superannuation Retirement & wealth Capital Gains Tax (CGT)

Better Targeted Superannuation Concessions exposure draft

Published Date: 19 Oct 2023


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The Tax Institute welcomes the opportunity to make a submission to the Treasury in relation to the exposure drafts of the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023 (draft Bill), Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 (draft Imposition Bill), and accompanying explanatory materials (draft EM).

In the development of this submission, we have closely consulted with our National Superannuation Technical Committee to prepare a considered response that represents the views of the broader membership of The Tax Institute.

The draft Bill proposes to insert new Division 296 into the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) to give effect to the Government’s announcement to introduce an additional 15% tax on earnings on superannuation balances above $3 million. We acknowledge the Government’s decision to impose a higher rate of tax on a subset of taxpayers. Our comments in this submission are aimed at ensuring the underlying policy is appropriately designed and implemented to achieve the intended policy objective and within the principles of good law design.

If implemented as proposed, Division 296 will tax unrealised capital gains, an approach that is inconsistent with Australia’s current approach of taxing realised capital gains under the capital gains tax (CGT) regime. Consistent with our submission regarding the earlier consultation paper (released on 31 March 2023), we continue to have concerns that Division 296 will set an undesirable and inappropriate precedent for future tax proposals in this regard. We note that the taxation of unrealised gains has historically only been used in the context of anti-avoidance provisions and should not be a feature in the design of this, or future, general taxation measures.

The taxation of unrealised gains is rife with issues, such as cash flow misalignment and increased compliance costs for taxpayers. The Tax Institute is of the view that if this aspect of the measure is to proceed, it should not be treated as an acceptable precedent for future tax reform proposals of any kind. In our view, there are other preferable alternatives to the proposed approach. For example, in the case of self-managed superannuation funds (SMSFs), it may be possible to introduce an alternative calculation based on an SMSF’s actual taxable income for some members to minimise the mechanism of taxing unrealised gains.

We also recommend the Government consider making key changes to the draft Bill to better ensure equitable outcomes. The full details are outlined in the download available on this page.


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The Tax Institute
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Superannuation Retirement & wealth Capital Gains Tax (CGT) Earnings and benefits (pensions and lump sums)

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