Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Australian Gunment is going to introduce unrealized capital gains
tax for super annuation or for my US viewers, that's
your four oh one k And this is absolutely insane.
So we're going to look into the details about this
one here, how it could affect you, and also how
it affect bitcoin and crypto holders, which is what we're
all interested in here. All right, let's get into the
(00:20):
details everyone. I'm Peter. If it's the first time here,
I hit that thumbs up light subscribe notification belt on
your way in. I like to keep you guys up
to date with everything that's happening in the crypto and
condano ecosystems. Now, this topic conversation came up when I
was at the Bitcoin Pizza Day events last week and
I was talking to a few Bitcoin holders there, and
(00:41):
obviously they have a lot more bitcoin than I ever
can possibly imagine. But these guys here were complaining about
the government's brand new bit of legislation that will tax
unrealized capital gains in their super annuation funds, and I thought, wow,
this is absolutely insane. How can the government do this.
This is taxing profits before you've actually made them, And
(01:04):
the guys were talking about the things that had to
do to get around this, and I thought it was insane.
So let's have a look at the details here. So
this is the Treasury Laws Amendment Better Targeted super Annuation
Concessions Bill twenty twenty three. You can see here it's
gone through multiple readings of the Australian Parliament as well.
But this is the details. Broadly, from the first of
(01:27):
July twenty twenty five. Division two nine six. Tax will
apply to members where total superannuation balance exceeds three million
and there has been an increase in their TSB at
the end of the relevant income year compared to their
TSB just before the start of that income year. This
movement is adjusted. TSB is termed super annuation earning, so
(01:51):
they're taxing that's bit of earning there. This portion of
the superannuation earnings that corresponds to the percentage of an
individual's TSB that exceeds three million makes up the tax
super annuation earning. The TC will be assessed to the
individual and subject to tax at a rate of fifteen percent.
Now I think reading that is a little bit hard
(02:11):
to understand, but let me just play this quick clip
here from hive Wise Australia.
Speaker 2 (02:17):
Whether you like it or not, the government is going
to introduce a new tax on unrealized capital gains, and
that basically means if the value of the asset has
gone up, you will pay tax on that, even though
you haven't actually sold the asset. And this rule will
apply to super funds that have a balance of three
million dollars or more. And look, I know what you're thinking,
Who the heck has that much money is sitting in
(02:38):
their super fund? And that's understandable because this new law
will initially only affect around eighty thousand people, which are
of course going to be eighty thousand very wealthy people. However,
the issue is that the government is not going to
index this three million dollar threshold, which means that they
are not going to adjust that threshold for inflation, So
even though inflation's going up, yshold will remain three million
(03:01):
in twenty years time. But what I'm most concerned about
is that the government the whole idea behind taxing unrealized games,
because nowhere else in the tax law can you tax
unrealized capital gains. It is not realized you have not
disposed or sole of the asset in order to pay
tax on it. It makes no sense. It's a horrible policy,
(03:22):
and it is inconsistent with fundamental tax principles. They're basically
just making up the rules now as they go. I mean,
what's next, You're going to start taxing unrealized games on
other types of outsets outside of super funds. Shouldn't give
them any ideas, but who knows if that's what they're
doing now. And so if this legislation passes through Senate,
that's all that they have to do to get it through,
then super funds from one July twenty twenty five will
(03:44):
be taxed at an additional fifteen percent if they have
a balance above three million dollars, which means that those
funds will be taxed at thirty percent. So it doesn't
really become an effective tax environment anymore if we think
about this deeper. Whilst the initially will affect just a
small amount of the population, in the long run, by
the time we all get to retirement, goodness knows what
inflation will be then, so we may very well reach
(04:07):
that three million dollar cap in thirty forty years time.
So it honestly just seems like the government trying to
get the hands on our super.
Speaker 1 (04:15):
Let's have a look at this article here from the
Australian Institute, written by Greg Jericho, and I thought this
was quite good to give you some perspective on how
and to who this would actually affect. So here we go.
Let's give you some details here. Almost no one will
be affected by these changes. Ninety nine to five percent
of Australians currently do not have more than three million
super You know that's quite frankly true. I looked up
(04:37):
the stats here as well, and I'll bring them up
in a second, using figures reported by austrain Financial Review.
Ninety seven percent of all people currently in labor force
will never have more than three million super. Do you
have more than three million super? No? Nothing changes. Are
you going to have more than three million Super? No?
Then nothing changes for you either. And I did have
a look at the general statistics around this. This is
(05:00):
from the Australian Government Tax Office website and you can
see here for the general amount of the population here
at their highest ever holdings of super annuation. This chart
here is from twenty twenty to twenty twenty one financial year,
but the total amount of super annuation held here is
maybe two hundred and twenty five thousand Australian dollars, so
(05:21):
it's not that high and nowhere near that three million mark.
So let's jump back to the article here now a
little bit for that down the idole does give you
a bit of a reality check of how much you'd
have to earn to actually get three million of SUPER
in your account. So let's have look at the scenario here.
So how much money. Well, let's create an eight year
old who just left school and see how they go.
(05:43):
So they'll start the full time job earning one hundred
and six two hundred and seventy seven dollars a year.
That sounds pretty good, especially with a year twolf certificate,
so no degree of any sort. They'll get a pay
rise of three point seven percent every year, which is
and then if we go so a little bit further
down here, they'll keep their job full time without ever
(06:04):
taking a day off or unpaid leave until the age
of sixty seven. Now, how much SUPER will this person
end up at the end of that working their full
entire life, According to the calculator on smart money, two
point one million, So it's still not quite at that
point of that three million mark. Now, of course there
(06:24):
is inflation and other factors that you need to take
into account, but the majority of Australias just won't be
touched by this three million threshold for their super annuation.
So if we have a look at the calculator here,
I put in some general details here, and let's say
the person here started at the age of eighteen. Let's
say they're earning one hundred and fifty thousand per year.
(06:47):
Let's go over in high one hundred and seventy thousand.
Their employee contributions are at eleven point five percent. Of course,
this will change over the course of their life. That
will probably increase and they may even put in some
more contributions. But let me continue with that calculator. There,
even after working a full entire lifetime here unto their retirement,
based on those particular sums, they still only earn one
(07:11):
point seven a million in their super annuation. So they're
still a long way off to that high threshold. So
the article continues here. So super tax changes right now
affect almost no one. The fear is. The fear about
not indexing the three million threshold is just scare campaign
designed to make people think they will be hit even
(07:32):
though they are only thirty years old. Now maybe because
they might one day have that much super and realistically,
like we saw here, it's kind of hard to see
that the general individual will ever make it to that point. Now,
what about crypto and bitcoin holders in general? If you're
just holding those crypto assets, you don't get tax for
(07:54):
the unrealized games. You only get tax on it when
you're disposed of those particular assets. But there are people
that do have self managed super funds, and if you
do hold crypto assets in there, which is an option,
you could be affected by this and it's something that
you might need to think about. Now. There's lots of
benefits of having a self managed super fund, and this
(08:16):
article from MFC goes through a lot of it here,
and one of it is to one access more investment options,
so not just going through index funds which your super
might have, but also tap into other things such as stamps,
coins and even physical gold and are our case for
a lot of crypto holders put in their BTC their
bitcoin and other crypto assets. So it makes things really
(08:38):
appealing because you can have a broad scope and range
of things that you can tap into and it gives
you a lot more control. But the main thing here
is that gives you this really good tax benefit. So
you're entitled to the same tax rates that are available
through super So your investment returns is tax at a
maximum of fifteen percent, provided that you're self managed super
(09:00):
fund is a complying fund, rather than your personal income
tax rate, which could be as high as forty five percent.
So this is definitely something for the high income earners
out there now. If you were to hold bitcoin or
crypto within yourself managed super fund, you could see this
unrealized capital gains tax hit you quite hard because if
(09:21):
you look at the price of bitcoin over the last
ten years, it has gained a lot of traction and
has risen in price quite a lot, and because of that,
you'll be paying tax on those unrealized capital gains even
though you didn't sell your assets. So this is something
that you really need to think about if you were
having your crypto assets within yourself managed super fund. And
(09:43):
I think this is what really spooked a lot of
the guys at the bitcoin meet up the other week
because they now had to move assets around to try
and manage their super funds. And their crypto assets. So
for me myself, I'm nowhere near this level, but there
are a lot of guys there that were talking about
this and complain about how they're going to manage their
crypto assets. So let me know in the comments down below, guys,
(10:04):
what you think about this taxing of unrealized capital gains
in your superannuation. I know there's a lot of benefits here.
It's trying to encourage people to invest in different sectors
rather than just property and having it in their super
so could potentially free up property on the market. But
there's some other really weird stuff like politicians not needing
to pay this particular tax so they're exempt for it,
(10:27):
or have it delayed for a number of years. So
there's a lot of things in there that doesn't really
quite add up. And of course it opens up the
government to potentially tax unrealized capital gains in other parts
of the tax system too, So we don't really know
what's going to happen here, and personally I don't think
it's a really good idea, but let me know in
the comments down below. Now, please know I'm not an
accountant or financial planner, and all of the information that
(10:49):
I talk about here is for informational and educational purposes only,
So if you're needing some more advice about this, please
reach out to a financial planner and there are plenty
out there that you can talk to help manage you
through this tax landscape. Now, if you enjoy this episode,
make sure you hear that thumbs up like subscribe novacation
Bell on your way out. I'll see you guys in
the next video.
The Australian Gunment is going to introduce unrealized capital gains
tax for super annuation or for my US viewers, that's
your four oh one k And this is absolutely insane.
So we're going to look into the details about this
one here, how it could affect you, and also how
it affect bitcoin and crypto holders, which is what we're
all interested in here. All right, let's get into the
(00:20):
details everyone. I'm Peter. If it's the first time here,
I hit that thumbs up light subscribe notification belt on
your way in. I like to keep you guys up
to date with everything that's happening in the crypto and
condano ecosystems. Now, this topic conversation came up when I
was at the Bitcoin Pizza Day events last week and
I was talking to a few Bitcoin holders there, and
(00:41):
obviously they have a lot more bitcoin than I ever
can possibly imagine. But these guys here were complaining about
the government's brand new bit of legislation that will tax
unrealized capital gains in their super annuation funds, and I thought, wow,
this is absolutely insane. How can the government do this.
This is taxing profits before you've actually made them, And
(01:04):
the guys were talking about the things that had to
do to get around this, and I thought it was insane.
So let's have a look at the details here. So
this is the Treasury Laws Amendment Better Targeted super Annuation
Concessions Bill twenty twenty three. You can see here it's
gone through multiple readings of the Australian Parliament as well.
But this is the details. Broadly, from the first of
(01:27):
July twenty twenty five. Division two nine six. Tax will
apply to members where total superannuation balance exceeds three million
and there has been an increase in their TSB at
the end of the relevant income year compared to their
TSB just before the start of that income year. This
movement is adjusted. TSB is termed super annuation earning, so
(01:51):
they're taxing that's bit of earning there. This portion of
the superannuation earnings that corresponds to the percentage of an
individual's TSB that exceeds three million makes up the tax
super annuation earning. The TC will be assessed to the
individual and subject to tax at a rate of fifteen percent.
Now I think reading that is a little bit hard
(02:11):
to understand, but let me just play this quick clip
here from hive Wise Australia.
Speaker 2 (02:17):
Whether you like it or not, the government is going
to introduce a new tax on unrealized capital gains, and
that basically means if the value of the asset has
gone up, you will pay tax on that, even though
you haven't actually sold the asset. And this rule will
apply to super funds that have a balance of three
million dollars or more. And look, I know what you're thinking,
Who the heck has that much money is sitting in
(02:38):
their super fund? And that's understandable because this new law
will initially only affect around eighty thousand people, which are
of course going to be eighty thousand very wealthy people. However,
the issue is that the government is not going to
index this three million dollar threshold, which means that they
are not going to adjust that threshold for inflation, So
even though inflation's going up, yshold will remain three million
(03:01):
in twenty years time. But what I'm most concerned about
is that the government the whole idea behind taxing unrealized games,
because nowhere else in the tax law can you tax
unrealized capital gains. It is not realized you have not
disposed or sole of the asset in order to pay
tax on it. It makes no sense. It's a horrible policy,
(03:22):
and it is inconsistent with fundamental tax principles. They're basically
just making up the rules now as they go. I mean,
what's next, You're going to start taxing unrealized games on
other types of outsets outside of super funds. Shouldn't give
them any ideas, but who knows if that's what they're
doing now. And so if this legislation passes through Senate,
that's all that they have to do to get it through,
then super funds from one July twenty twenty five will
(03:44):
be taxed at an additional fifteen percent if they have
a balance above three million dollars, which means that those
funds will be taxed at thirty percent. So it doesn't
really become an effective tax environment anymore if we think
about this deeper. Whilst the initially will affect just a
small amount of the population, in the long run, by
the time we all get to retirement, goodness knows what
inflation will be then, so we may very well reach
(04:07):
that three million dollar cap in thirty forty years time.
So it honestly just seems like the government trying to
get the hands on our super.
Speaker 1 (04:15):
Let's have a look at this article here from the
Australian Institute, written by Greg Jericho, and I thought this
was quite good to give you some perspective on how
and to who this would actually affect. So here we go.
Let's give you some details here. Almost no one will
be affected by these changes. Ninety nine to five percent
of Australians currently do not have more than three million
super You know that's quite frankly true. I looked up
(04:37):
the stats here as well, and I'll bring them up
in a second, using figures reported by austrain Financial Review.
Ninety seven percent of all people currently in labor force
will never have more than three million super. Do you
have more than three million super? No? Nothing changes. Are
you going to have more than three million Super? No?
Then nothing changes for you either. And I did have
a look at the general statistics around this. This is
(05:00):
from the Australian Government Tax Office website and you can
see here for the general amount of the population here
at their highest ever holdings of super annuation. This chart
here is from twenty twenty to twenty twenty one financial year,
but the total amount of super annuation held here is
maybe two hundred and twenty five thousand Australian dollars, so
(05:21):
it's not that high and nowhere near that three million mark.
So let's jump back to the article here now a
little bit for that down the idole does give you
a bit of a reality check of how much you'd
have to earn to actually get three million of SUPER
in your account. So let's have look at the scenario here.
So how much money. Well, let's create an eight year
old who just left school and see how they go.
(05:43):
So they'll start the full time job earning one hundred
and six two hundred and seventy seven dollars a year.
That sounds pretty good, especially with a year twolf certificate,
so no degree of any sort. They'll get a pay
rise of three point seven percent every year, which is
and then if we go so a little bit further
down here, they'll keep their job full time without ever
(06:04):
taking a day off or unpaid leave until the age
of sixty seven. Now, how much SUPER will this person
end up at the end of that working their full
entire life, According to the calculator on smart money, two
point one million, So it's still not quite at that
point of that three million mark. Now, of course there
(06:24):
is inflation and other factors that you need to take
into account, but the majority of Australias just won't be
touched by this three million threshold for their super annuation.
So if we have a look at the calculator here,
I put in some general details here, and let's say
the person here started at the age of eighteen. Let's
say they're earning one hundred and fifty thousand per year.
(06:47):
Let's go over in high one hundred and seventy thousand.
Their employee contributions are at eleven point five percent. Of course,
this will change over the course of their life. That
will probably increase and they may even put in some
more contributions. But let me continue with that calculator. There,
even after working a full entire lifetime here unto their retirement,
based on those particular sums, they still only earn one
(07:11):
point seven a million in their super annuation. So they're
still a long way off to that high threshold. So
the article continues here. So super tax changes right now
affect almost no one. The fear is. The fear about
not indexing the three million threshold is just scare campaign
designed to make people think they will be hit even
(07:32):
though they are only thirty years old. Now maybe because
they might one day have that much super and realistically,
like we saw here, it's kind of hard to see
that the general individual will ever make it to that point. Now,
what about crypto and bitcoin holders in general? If you're
just holding those crypto assets, you don't get tax for
(07:54):
the unrealized games. You only get tax on it when
you're disposed of those particular assets. But there are people
that do have self managed super funds, and if you
do hold crypto assets in there, which is an option,
you could be affected by this and it's something that
you might need to think about. Now. There's lots of
benefits of having a self managed super fund, and this
(08:16):
article from MFC goes through a lot of it here,
and one of it is to one access more investment options,
so not just going through index funds which your super
might have, but also tap into other things such as stamps,
coins and even physical gold and are our case for
a lot of crypto holders put in their BTC their
bitcoin and other crypto assets. So it makes things really
(08:38):
appealing because you can have a broad scope and range
of things that you can tap into and it gives
you a lot more control. But the main thing here
is that gives you this really good tax benefit. So
you're entitled to the same tax rates that are available
through super So your investment returns is tax at a
maximum of fifteen percent, provided that you're self managed super
(09:00):
fund is a complying fund, rather than your personal income
tax rate, which could be as high as forty five percent.
So this is definitely something for the high income earners
out there now. If you were to hold bitcoin or
crypto within yourself managed super fund, you could see this
unrealized capital gains tax hit you quite hard because if
(09:21):
you look at the price of bitcoin over the last
ten years, it has gained a lot of traction and
has risen in price quite a lot, and because of that,
you'll be paying tax on those unrealized capital gains even
though you didn't sell your assets. So this is something
that you really need to think about if you were
having your crypto assets within yourself managed super fund. And
(09:43):
I think this is what really spooked a lot of
the guys at the bitcoin meet up the other week
because they now had to move assets around to try
and manage their super funds. And their crypto assets. So
for me myself, I'm nowhere near this level, but there
are a lot of guys there that were talking about
this and complain about how they're going to manage their
crypto assets. So let me know in the comments down below, guys,
(10:04):
what you think about this taxing of unrealized capital gains
in your superannuation. I know there's a lot of benefits here.
It's trying to encourage people to invest in different sectors
rather than just property and having it in their super
so could potentially free up property on the market. But
there's some other really weird stuff like politicians not needing
to pay this particular tax so they're exempt for it,
(10:27):
or have it delayed for a number of years. So
there's a lot of things in there that doesn't really
quite add up. And of course it opens up the
government to potentially tax unrealized capital gains in other parts
of the tax system too, So we don't really know
what's going to happen here, and personally I don't think
it's a really good idea, but let me know in
the comments down below. Now, please know I'm not an
accountant or financial planner, and all of the information that
(10:49):
I talk about here is for informational and educational purposes only,
So if you're needing some more advice about this, please
reach out to a financial planner and there are plenty
out there that you can talk to help manage you
through this tax landscape. Now, if you enjoy this episode,
make sure you hear that thumbs up like subscribe novacation
Bell on your way out. I'll see you guys in
the next video.
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