Tax Planning
5 Strategic Moves for Wealthy Individuals ahead of Australia’s New Super Concessions
With superannuation concessions tightening from 1 July 2025, high-net-worth Australians need tactical planning to minimise the impact on their retirement savings.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## What’s Changing in Superannuation Tax Concessions?
- From **1 July 2025**, individuals with **total super balances above AUD $3 million** will face reduced tax concessions: earnings attributable to the amount above AUD $3 million will be taxed at **30%**, not the standard rate.([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
- These changes are part of the **Better Targeted Superannuation Concessions** measure announced in the 2023–24 Federal Budget.([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/special-purpose-working-groups-key-messages/better-targeted-superannuation-concessions-working-group/better-targeted-superannuation-concessions-working-group-key-messages-20-march-2025?utm_source=openai))
## Who is Impacted?
- Individuals near or exceeding $3 million in super balance at 30 June 2025.
- Defined Benefit members and self-managed super fund (SMSF) holders who have not rebalanced risk exposures. More than 99.5% of super members are not affected.([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/special-purpose-working-groups-key-messages/better-targeted-superannuation-concessions-working-group/better-targeted-superannuation-concessions-working-group-key-messages-20-march-2025?utm_source=openai))
## Strategic Planning Moves
1. **Audit and Forecast Your Super Balance**
- Estimate whether your balance will exceed the threshold by 30 June 2025; this can inform contribution decisions before year-end.
- Recall that concessional contributions (pre-tax) are limited each year; non-concessional contributions have different caps. Check these before acting up.([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/fund-reporting-protocols/contributions-reporting-protocol/types-of-contributions-to-report/changes-to-reserve-allocations?utm_source=openai))
2. **Prioritize Tax-free Earnings or Tax-offset Investments**
- Position a portion of your portfolio in tax-free segments (e.g. investments that produce franked dividends) or personally-owned assets that may enjoy **capital gains discounts**.
- Consider consolidating to reduce fees and maximise efficiency.
3. **Marginalise Your Growth on Above-threshold Balance**
- Shift growth investments in the portion above $3 million into more stable or lower return assets to reduce tax exposure.
- Delaying contributions on that portion may be a strategy if the marginal return does not outweigh the extra taxation.
4. **Review Your Retirement Product Types**
- Check whether legacy retirement income streams or annuities you hold are “legacy” products; rules regarding exit options and reserves changed for those.([ato.gov.au](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/smsf-newsroom/changes-to-legacy-retirement-products-impacting-smsfs?utm_source=openai))
- These changes affect how reserve allocations count towards concessional or non-concessional caps—older products may require planning.([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/apra-regulated-funds/fund-reporting-protocols/contributions-reporting-protocol/types-of-contributions-to-report/changes-to-reserve-allocations?utm_source=openai))
5. **Monitor Legislative Progress & Indexation**
- The $3 million threshold may **not** be indexed—watch Budget announcements for inflation adjustment. If you’re close, indexing could matter.([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/special-purpose-working-groups-key-messages/better-targeted-superannuation-concessions-working-group/better-targeted-superannuation-concessions-working-group-key-messages-20-march-2025?utm_source=openai))
- Understand that some measures (like Payday Super) are upcoming and will affect employer obligations, cashflows, and system timing.([ato.gov.au](https://www.ato.gov.au/tax-and-super-professionals/for-superannuation-professionals/super-funds-newsroom/ato-corporate-plan-2025-26-key-priorities-for-super-funds?utm_source=openai))
## Illustrative Example
Suppose Jane has $3.5M in super at 30 June 2025. Earnings are normally taxed at **15%**, but under new rules, earnings on **$500,000** above the threshold will attract a tax concession capped at 15%, meaning effective tax on those earnings becomes **30%**. If Jane can shift $200,000 of that balance into lower growth or tax-favoured investments, she could save thousands in tax each year.
## Actionable Advice Before 30 June 2025
- Evaluate contribution strategies now—may be better to pause contributions or reallocate assets to reduce above-threshold earnings.
- Liaise with your super fund or financial adviser to understand how reserves are treated in both legacy and current products.
- Stay alert for ATO guidance clarifying ambiguous areas like caps on reserve allocations and what constitutes assessable/income earnings for concession calculations.
Navigating these upcoming changes with intentional planning can protect more of your retirement nest egg while avoiding surprise tax liabilities.