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John Wasiliev

How defined benefits pensions will be treated under Division 296 tax

Defined benefit pensions may present special challenges, but they will not escape the government’s proposed $3 million super tax.

Q: Could you please explain how defined benefit pensions will be treated under the proposed $3 million super tax, including when they are transferred upon death? Am I right that the $3 million super debate appears to be leaving these alone? Are there any formal documents that show this? Fiona.

A: With a small number of exceptions, defined benefit pensions are most definitely included under the $3 million super tax. You are therefore not correct that the $3 million super debate appears to be leaving these alone, says financial planner Jemma Sanderson of Perth-based Cooper Partners Financial Services.

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John Wasiliev is a veteran SMSF specialist and has provided answers to readers' questions on superannuation for decades. Have a super question you'd like answered? Email John at superquestions@afr.com

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    Original URL: https://www.afr.com/wealth/personal-finance/how-defined-benefits-pensions-will-be-treated-under-division-296-tax-20250623-p5m9nl