These two worked examples show how the taxing of unrealised capital gains can have unintended consequences.
is aimed at the very wealthy, many more people are likely to feel the impact.
– a first for the Australian tax system. This is a fundamental shift and, while targeting high-wealth superannuants, sets a dangerous precedent for future tax reform. Since unrealised gains are not taxed on assets held outside the fund, John would pay at least $4644 more tax than if the assets had been held outside super. The implicit tax rate on the fund’s realised earnings of $80,000 would be 51 per cent – exceeding the top marginal tax rate.
June keeps about half of her fund in cash and blue-chip shares to provide her with an adequate retirement income, and the other half is invested in higher-risk investments to cover longevity risk and possible medical expenses. Included in the fund’s higher risk investments is a $400,000 investment in a newly listed start-up company.
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