UPDATE: Division 296 for super balances over $3m is now law
As of 10 March 2026, the new Division 296 legislation has passed, bringing a tax for individuals whose super balances are over $3 million.
Key clarification
SMSFs can elect to reset asset cost bases to 30 June 2026 values, excluding pre-2026 growth from Division 296. The tax applies at two thresholds: 15% above $3m, 25% above $10m, both indexed.
What this means for you
For most people, keeping the investments inside super will still be the most tax-effective outcome. But that doesn’t mean there aren’t decisions that can be made to reduce the impact of this new tax.
How we can help
We’re across these changes and can help quantify what they mean for you. Reach out to your Maxim advisor or contact our team to explore potential strategies and next steps.
Important changes to Division 296 for super balances over $3 million!
After a long wait, Jim Chalmers and the Albanese Government have just made some changes to Division 296 – the changing rules around super. Here’s a quick summary with our comments.
Key change: Delay to 1 July 2026
The legislation was originally set to kick in on 1 July 2025. That’s now been pushed back a year to 1 July 2026.
This gives everyone a bit more breathing room and time for further guidance, so you can make informed decisions about which assets stay in or out of your super.
Tax on unrealised gains removed
The proposed tax on unrealised gains, which would have put pressure on cash flow, has been scrapped. A big win!
But, there’s still a question mark: what happens to high-growth assets held before 1 July 2026? Will they face the Division 296 tax on the full realised amount after the new rules kick in?
It makes sense that an adjustment should be made, but the mechanics could be tricky. We’ll be keeping a close eye on this detail.
New $10 million threshold in addition to $3 million
Here’s the gist:
- Above $3 million (per individual): Personal 15% tax on earnings above $3 million balance threshold.
- Above $10 million: A further 25% tax on earnings above $10 million balance threshold (the 15% plus an extra 10%).
The government is clearly looking to keep super balances under control.
Both thresholds will be indexed, just like current contribution caps. Defined benefit pensions are included and will be taxed on a similar basis.
How we can help
At this stage, we’re happy to talk through how these changes might affect you. Once the legislation is released, we’ll have the full picture and know exactly what it means for your super.
