Superannuation tax on earnings depends on investment option?

Bob01 on 15/03/2020 - 11:56
Last edited 15/03/2020 - 13:09

On the market for a better superfund, currently with UniSuper. Doing some research and found this website https://moneysmart.gov.au/how-super-works/superannuation-cal…

Now my main question is what is the "tax on earnings"? I was under the impression of this being flat 15%. And a simple google search does also say 15%. But on this government website the investment option dictates the tax level. For example the "balanced" option = 6.5% tax, the "high growth" option has 4.1% tax and weirdly the cash option has full 15% tax!

Does the government reward high risk with lower tax in super ?

Financial

Comments

  • mskeggs on 15/03/2020 - 12:12

    I’m not clear on why this is, but super CGT discount rate is 10%, so that would be part of it.
    Perhaps the assumption is growth assets would remain unsold until retirement/pension phase? So only the income portion of balanced and growth portfolios are taxed?

  • Baysew on 15/03/2020 - 12:52

    this website

    Page not found.

  • Bob01 on 15/03/2020 - 13:08

    https://moneysmart.gov.au/how-super-works/superannuation-cal…

    sorry here it is again

  • macola51 on 15/03/2020 - 13:30
    +1

    Super tax is 15% on employer contributions, or pre-tax contributions made the employee (salary sacrifice).
    Tax on earnings in the fund is 15%.
    According to Superratings website, UniSuper is up in the lists of Top 10 funds for performance, lowest fees, lowest insurance costs. Why are you looking to change??

  • Baysew on 15/03/2020 - 13:39
    +1

    Dividend Imputation reduces the tax payable by the super fund. Also distributions may have tax free components and capital gains.

    It's a bit like your personal tax, tax deductions and Franking Credits reduce the actual % tax paid on earnings.

    Tax on fund investment earnings

    Your super fund investment earnings (such as interest, dividends and rental income) are generally taxed at 15% when you are in the accumulation phase (i.e. making contributions to your fund), less any allowable tax deductions or credits (e.g. franking credits from Australian shares under the dividend imputation system).

    Franking credits are the tax that a company has already paid on a share dividend. Super funds (including self-managed super funds) can use these credits as an offset against their taxable income.

    In addition, all Australian super funds are liable to pay capital gains tax on any capital gains made on the sale of capital assets (e.g. shares or property). The capital gain is the difference between the selling price of the asset and its cost base. This gain is taxed at 10% if the asset is held for longer than 12 months. Capital gains made on the sale of assets that are held for less than 12 months are taxed at 15%.

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