Division 296 Superannuation Tax Changes
What Is Division 296?
Division 296 is an additional tax applied to individuals whose Total Superannuation Balance (TSB) exceeds $3 million.
For individuals and families with significant superannuation assets, this represents a structural change to how retirement savings may be taxed in the future.
When Will Division 296 Start?
The commencement date will be 1 July 2026, with first assessment based on balances as at 30 June 2027. This means planning decisions made today may influence outcomes under the new rules.
How Will The Division 296 Tax Work?
Under the current legislation:
- Earnings attributable to super balances between $3 million and $10 million will be taxed an additional 15%
- Earnings attributable to balances above $10 million will attract an additional 25%
- The tax applies only to realised earnings, not contributions or unrealised growth
- The calculation methodology is complex and requires careful modelling to understand how it applies to individual circumstances, particularly where SMSFs or multiple accounts are involved.
Why Is General Advice Not Enough?
For high-net-worth families, SMSF trustees, and business owners, the impact of Division 296 cannot be assessed in isolation.
Key factors that must be considered include:
- Capital Gains Tax implications outside super
- Timing of asset realisation decisions
- Estate planning and wealth transfer strategies
- Insurance and liquidity requirements
- Long-term retirement income objectives
- Business succession planning where super forms part of broader wealth structures
Without detailed modelling, decisions made in response to headline tax changes may unintentionally reduce long-term wealth efficiency.
What Steps Should You Should Be Taking Now?
If your superannuation balance is approaching or exceeds $3 million, now is the time to review your position. Certain strategies may need to be implemented before 30 June 2026 to ensure optimal positioning under the new rules.
At Morrows, we are working closely with clients to:
- Model the potential impact of Division 296
- Assess SMSF and non-SMSF structuring options
- Evaluate tax-effective wealth rebalancing strategies
- Align superannuation planning with broader estate and retirement objectives
- How Morrows Can Help
As a trusted wealth advisory firm working with high-net-worth individuals, business owners, and family groups, we provide tailored, strategic advice based on your full financial picture.
We do not rely on general assumptions or broad-based modelling. Every recommendation is grounded in your personal objectives, asset structure, and long-term goals.
If you would like to understand how Division 296 may affect your situation, you can:
- Watch Our Latest Division 296 Webinar: Gain a clear overview of the legislation and key planning considerations.
- Book a Confidential Strategy Consultation: Speak with one of our Morrows financial advisers for tailored advice specific to your circumstances.
Speak With an Accredited Financial Adviser and Expert on Division 296
If your superannuation balance is above or near $3 million, early planning is essential.
Complete the form below to access our webinar or arrange a confidential consultation with our advisory team.
We will help you understand the implications, identify opportunities, and develop a strategy aligned with your broader wealth and retirement goals..