Tax and Structures
Superannuation taxation
Tax rates in accumulation and pension phase
The tax rules differ for the two phases of super:
1. The accumulation phase, and
2. The pension (drawdown) phase.
The first phase is the accumulation phase, when money is contributed to superannuation, usually during your working years.
The pension phase begins when you start to draw down an income from your superannuation.
The tax rate on earnings within a super fund in the accumulation phase is a maximum 15%. For the pension (drawdown) phase the tax rate is 0% for superannuation balances up to $1.6 million per person at the time that the pension commenced. Balances over $1.6 million are not eligible for the zero pension tax rate and must revert back to a superannuation account in accumulation phase and be subject to 15% tax on future earnings.
Please note: The earnings from assets supporting new and existing transition to retirement pensions are no longer subject to an earnings tax exemption. Asset earnings are now taxed up to 15%, the same as if the monies were still in accumulation stage; however, this taxation applies until another condition of release is met, such as reaching age 65.
