Higher tax on large super balances: What trustees should be checking this year
If you're an SMSF trustee, you'll already know that higher tax on large super balances has been on the agenda for some time.
It's now settled, and there's a detail in the final version that many trustees haven't caught up with.
There are two tiers, not one. Earnings on balances above $3 million move from 15% to 30%. Balances above $10 million attract a further 40% rate on top of that.
What this means in practice
For most SMSF members, the $3 million threshold is the one that matters.
Above that level, the concessional 15% rate no longer applies to the earnings attributable to the balance above the threshold. The rate doubles.
The threshold is applied per member, not per fund. In a two-member fund where one member holds most of the balance, only that member is affected.
Why SMSFs feel this differently
An industry fund member above the threshold has a straightforward liability against a liquid balance. SMSF trustees often don't.
The complication is what your fund actually holds.
If a significant part of the fund's value sits in a commercial property, a farm, or unlisted assets, you may be looking at a tax liability that has to be paid in cash against a balance that isn't easily converted to cash. That's a planning problem, not just a tax one.
Valuations also carry more weight than they used to. Where your fund holds assets without an obvious market price, the valuation approach you use now has a direct effect on your tax position.
Property inside the fund
There was a related change in June 2026.
As part of the negotiations to pass the Budget tax package, the rules covering investors purchasing property through a self-managed super fund were tightened.
If property acquisition through your fund is part of your strategy, or you're partway through one, this is worth confirming against the current rules before you go further.
Where trustees get caught out
It's worth reviewing your fund if:
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One member's balance is approaching or above $3 million
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A large share of the fund's value sits in property or unlisted assets
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Your asset valuations are informal or several years old
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The fund holds limited cash relative to its total value
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Your contribution strategy was set years ago and hasn't been revisited
What to do now
Get your valuations right. Defensible, current valuations matter more under the new arrangements than they did before. Informal estimates are no longer good enough.
Look hard at liquidity. Model what a tax liability would look like against the assets your fund actually holds, and whether it could be paid without a forced sale.
Review your contribution strategy. For members near the threshold, continuing to contribute may not be the automatic answer it once was.
Think about the estate planning angle. Higher tax on large balances changes the calculation around death benefit nominations and how benefits are ultimately paid out.
Want to review your fund's position?
None of this makes an SMSF the wrong structure. For most trustees it remains a sound one. But the settings that worked well under a flat 15% rate deserve a fresh look.
If your fund is anywhere near the thresholds, or you're not certain how your assets would be valued, it's worth a conversation. To book an appointment, contact our office.