Super Balances Over $3 Million: Should High-Net-Worth Australians Rethink Their Strategy?
The 2026 Budget reduces superannuation tax concessions for balances above $3 million, but super remains insulated from the new CGT and negative gearing reforms. With discretionary trusts facing a 30% minimum tax and companies becoming more attractive for some investors, high-net-worth Australians may need to review how their wealth is structured.
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Introduction
For years, superannuation has been one of the most tax-effective wealth-building vehicles available to Australians. Its concessional tax rates, long-term investment horizon, and protected retirement focus have made it a cornerstone of wealth accumulation for successful professionals, business owners, and retirees.
The 2026 Federal Budget reinforces the Government's commitment to reducing tax concessions for individuals with superannuation balances exceeding $3 million. At the same time, the Budget introduces broader reforms affecting Capital Gains Tax (CGT), discretionary trusts, and property investment.
For high-net-worth Australians, the question is not whether superannuation remains valuable. The question is whether the changing tax landscape alters how wealth should be structured between superannuation, trusts, companies, and personal ownership.
What Is the $3 Million Superannuation Measure?
The Budget confirms the Government's intention to reduce tax concessions available to individuals whose total superannuation balance exceeds $3 million.
The stated objective is to improve the equity and sustainability of the superannuation system.
According to the Government, superannuation is intended primarily to fund retirement income rather than serve as an unlimited tax-preferred wealth accumulation vehicle.
Importantly, the measure does not remove superannuation's tax advantages altogether. Instead, it reduces the level of concessional treatment available on balances above the threshold.
For the vast majority of Australians, the proposal has no direct impact. However, for high-net-worth individuals, business owners, executives, and long-term investors who have accumulated substantial balances, the measure warrants careful review.
What Is Not Changing?
Before examining alternatives, it is important to understand what remains intact.
Despite widespread tax reforms elsewhere in the Budget, superannuation remains largely insulated from:
The proposed replacement of the 50% CGT discount.
Negative gearing restrictions.
Rental loss quarantining.
The new discretionary trust tax framework.
This distinction matters because it preserves superannuation's role as a separate retirement savings system with its own tax rules.
The first $3 million of a member's balance continues to benefit from the existing concessional environment.
For many high-net-worth Australians, that alone remains a compelling advantage.
Does the $3 Million Threshold Mean Super Is No Longer Attractive?
Not necessarily.
One common reaction to higher taxation is to assume money should be moved elsewhere. However, investment structures should be assessed relative to the alternatives available.
The 2026 Budget does not simply change superannuation.
It also introduces new constraints across other commonly used wealth structures.
As a result, the comparison is no longer between today's superannuation rules and yesterday's trust rules. The comparison is between the new superannuation environment and the new rules applying elsewhere in the tax system.
The Discretionary Trust Alternative Is Also Changing
Historically, discretionary trusts have been widely used by affluent families for wealth accumulation, asset protection, succession planning, and tax management.
The Budget introduces a major change from 1 July 2028. A 30% minimum tax will apply to the taxable income of discretionary trusts, paid by the trustee.
The Government's objective is to limit the ability to distribute income to beneficiaries on lower tax rates. For many investors, this reduces one of the primary tax advantages associated with discretionary trusts.
The practical implication is that moving assets from superannuation into a discretionary trust may no longer produce the same tax outcomes that were available in previous years.
This does not mean discretionary trusts lose their value entirely.
They may still provide:
Asset protection benefits.
Estate-planning flexibility.
Family succession advantages.
Investment ownership flexibility.
However, the tax comparison becomes less straightforward.
Could Companies Become More Attractive?
Companies may receive greater attention from high-net-worth investors following the Budget reforms.
Eligible small companies with turnover below $10 million can access a 25% corporate tax rate. Companies also offer features that differ from both superannuation and trusts.
These include:
The ability to retain profits.
Greater flexibility for reinvestment.
Clear ownership structures.
Access to loss carry-back provisions.
The Budget makes permanent a two-year loss carry-back regime for companies with turnover up to $1 billion. This allows companies to obtain refunds of tax paid in previous years if losses arise later.
For investors running businesses or managing active investment operations, these features may increase the appeal of corporate structures.
That said, companies are not direct substitutes for superannuation. Each structure serves different objectives and operates under different taxation rules.
A New 30% Theme Across the Tax System
One of the more noticeable features of the Budget is the emergence of a 30% benchmark across several reforms.
The Government proposes:
A 30% minimum tax on discretionary trust income.
A 30% minimum tax on real capital gains under the new CGT framework.
Reduced concessions affecting superannuation balances above $3 million.
The stated goal is to create greater consistency between the taxation of wealth and the taxation of labour income.
Whether investors agree with that policy objective or not, the direction of travel is clear.
Tax planning strategies that relied on very low effective tax rates are becoming harder to implement.
Why Superannuation May Still Remain Central
Despite the changes, superannuation continues to offer advantages that are difficult to replicate elsewhere.
These include:
A separate tax framework.
Long-term retirement planning benefits.
Protection from several proposed Budget reforms.
Estate-planning opportunities.
A concessional environment for balances below $3 million.
For high-net-worth Australians, the question may not be whether to abandon superannuation.
Instead, the focus may shift toward determining how much wealth should be held within superannuation compared with other structures.
In many cases, maintaining a strong superannuation position may remain entirely appropriate even after the reforms.
What About SMSFs?
Self-managed super funds remain relevant under the proposed framework.
For investors who value control over:
Asset allocation.
Property investments.
Direct share ownership.
Alternative investments.
An SMSF may continue to play an important role.
The proposed reforms do not remove the ability to use an SMSF as part of a broader wealth strategy.
However, members with balances approaching or exceeding $3 million may wish to review:
Contribution strategies.
Pension strategies.
Asset allocation.
Estate-planning arrangements.
The objective is to ensure the fund remains aligned with long-term goals under the evolving tax framework.
Venture Capital & Growth Investments
The Budget also includes measures aimed at improving venture capital investment settings.
Asset and fund-size caps for venture capital programs will be adjusted for inflation.
The intention is to provide investors and funds with greater flexibility to support innovative and high-growth businesses.
For high-net-worth investors seeking growth opportunities, these changes may expand the range of investment options available within existing structures, including superannuation funds where permitted.
Should High-Net-Worth Australians Rethink Their Super Strategy?
The answer is not necessarily to reduce exposure to superannuation.
The more appropriate question is whether your overall wealth structure remains fit for purpose under the proposed rules.
The Budget changes create a different environment for:
Superannuation.
Discretionary trusts.
Property investments.
Capital gains.
Family wealth structures.
For some investors, the right response may involve no major changes at all.
For others, it may involve reviewing ownership structures, succession plans, SMSF arrangements, trust strategies, and future contribution plans.
The strongest decisions are rarely driven by a single tax change. They are driven by a comprehensive understanding of how different structures work together to support long-term wealth objectives.
If your superannuation balance is approaching or exceeds $3 million, now may be an appropriate time to review your broader wealth strategy. Book a free 15-minute call with James Hayes to discuss how the proposed Budget changes could affect your superannuation, investment structures, and long-term financial plan.