Taxing unrealised profit is not good policy. But your figures...

Taxing unrealised profit is not good policy. But your figures are wildly wrong.

Using your initial figures of 1 million shares valued at $5 on July 1 2025, valued at $7 on June 30 2026. The proposed tax is calculated as a percentage of the annual growth, not the final balance, with the first $3mill of the balance exempt. The formula in you example would be ($7m - $5m) x 0.15 x ($7m - $3m)/ $3m. A tax of $400k.

The sting is not the final tax rate. In your example with shares held for more than 12 months the tax rate over 5 years would approach but never exceed 25%. Making it pretty much the same as the tax rate on a personal holding. Which is the intent really… to tax money in super above the $3m mark at a rate similar to non-super holdings. Both parties do not want very large holdings in super to be taxed at a discount rate.

The issue with the current proposal is having sell assets on an annual basis. In you example this would obviously reduce the final super balance at the 5 year point.

Taxing unrealised gains is a poor policy choice.