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Key Details of Proposed Division 296 Legislation

Division 296 Super Tax: What the Proposed Rules Mean for High-Balance Funds

  • Thresholds & Tax Rates: A 15% additional tax (30% total) applies to earnings on balances between $3 million and $10 million, while earnings on balances over $10 million face an additional 25% (40% total). Both thresholds are indexed.
  • Realised Earnings: The tax focuses on realised earnings (not unrealised gains) and is based on a specific formula involving the taxable income of the fund, excluding non-arm’s length income.
  • Assessment: The tax is levied on individuals, not the super fund, with options to pay from personal assets or release funds from super.
  • Status: The Bill passed the Senate on Tuesday 10th March 2026. 

Division 296 Key Considerations

  • Timing: The tax applies to the 2026/27 financial year, with the first potential tax liability arising on 1 July 2027.
  • Threshold Calculation: The $3 million threshold is tested using the higher of the start or end-of-year balance (subject to transitional rules).
  • Impact: Primarily affects individuals with high superannuation balances (typically >$3M).

Unsure how Division 296 could impact your super strategy?

Speak with Omnis’ SMSF Specialist Peta Berry for tailored guidance on navigating the changes announced — book a confidential review today.

Related

Division 296 Super Tax Bill introduced to Parliament
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Justin Flavel

Managing Director

Justin’s experience spans across 20 years in accounting, financial analysis and general business practice.

Although born and bred on the land, Justin’s interest was more in spreadsheets, ledgers, and finance which led him to attend university. In 1992, Justin graduated with a Bachelor of Business majoring in Accounting and Finance. As well as qualifying as a CPA member and becoming a Fellow of the Taxation Institute of Australia, he began gaining practical experience in small and mid-tier accounting practices.

During the late 90s, Justin decided to expand his horizons and travel through Europe. It was during this time that he seized the opportunity to expand his knowledge on the workings of large organisations by taking on roles in multinational corporations.

Today, Justin’s passion is in facilitating businesses to grow and evolve. His focus is on acting in the role of business mentor to help clients develop the full potential of their businesses. He joins clients on their unique journey, and provides the tools and knowledge they need along the way to make the right decisions.

Justin’s aim for his clients parallels his own philosophy and personal journey—focusing on his own career growth and business success while maintaining balance in his life with his wife and three daughters.

Omnis Group Managing Director - Justin Flavel