Tax Planning
Tax Planning Under Australia’s Super Concessions for High-Balance Funds
With upcoming changes that reduce tax concessions for super balances above $3 million, individuals need strategic planning to protect retirement savings and optimise after-tax earnings.
By NomadicTax Research Team • 6 min read • November 16, 2025
## What’s Changing
From **1 July 2025**, superannuation balances exceeding **AUD 3 million** will face a **new rate of 30% tax on future earnings** above that threshold. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai)) This policy—known as *Better Targeted Superannuation Concessions*—is not yet law but is expected to reshape how high-net-worth individuals manage their retirement funds. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
## Who’s Affected
- Account holders whose total super balances exceed AUD 3 million. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
- Earnings generated **after 1 July 2025** on amounts above the $3 million threshold. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
- The rest of your super balance continues to be taxed under existing concessional arrangements. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai))
## Strategic Planning Moves
| Strategy | What to Do | Why It Helps |
|---|---|---|
| **Precontribution review** | Evaluate your super balance now; delay large contributions or earnings where possible until after the threshold adjustments. | Minimises the portion of your assets subject to higher tax. |
| **Asset allocation** | Shift high-yield but taxable assets into lower-yield or lower-taxed vehicles. Consider growth assets whose gains might be more tax-efficient. | Reduces the earnings portion subject to the 30% rate. |
| **Multiple super accounts** | Multiple funds don’t allow you to evade the threshold—it applies across all super balances. But it might help with estate planning or diversified management. | Keeps your strategy compliant. |
| **Timing investment gains** | Realise certain capital gains or losses before the effective date to lock in tax treatments under older rules. | Moves gains into periods with more favorable tax treatment. |
## Examples
- *Case A*: Sarah has AUD 2.8 million in super. If she receives a AUD 500,000 contribution or earns substantial investment income before 30 June, that would push her above the threshold. She can delay discretionary contributions until after minimalist legal reform or split inside/outside super where possible.
- *Case B*: John’s super is at AUD 4.5 million. Only earnings on the portion above AUD 3 million—from **AUD 1.5 million onward**—face the 30% rate. Adjusting his asset mix so that growth assets are concentrated in lower taxed segments can save on tax drag.
## Guardrails & Compliance Risks
- These are proposed measures: currently **not yet law**. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/better-targeted-superannuation-concessions?utm_source=openai)) But they are published as *new legislation in detail*, meaning early planning can anticipate implementation.
- Be careful: Australia’s **non-arm’s length income**, **super guarantee obligations**, and **reporting requirements** for super funds could draw scrutiny if leveraged improperly. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/non-arm-s-length-income-changes-for-superannuation-funds?utm_source=openai))
## Action Steps
1. Review your super balance as of 30 June 2025 to understand your exposure.
2. Consult a financial adviser specializing in super to model your post-July 2025 earnings and tax implications.
3. Where possible, defer non-essential contributions or adjust investment strategies ahead of implementation.
4. Monitor the legislation’s passage through Parliament to confirm whether the measure becomes law as proposed.
## Bottom Line
These proposed changes make it crucial for high super account holders to plan ahead. While earnings under the AUD 3 million threshold stay under the existing tax regime, any amount above will face steeper taxation. With advanced planning, you can reduce the impact while staying compliant and preserving more of your retirement nest egg.