Content updated 8 October 2026
Originally published 10 March 2023 · About Bradley Stewart
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Division 296 is now law and applies from 1 July 2026. It adds a personal tax on certain super earnings attributable to balances above $3 million, with an additional tier above $10 million. It does not impose a flat tax on your entire account balance.
The earlier proposal described in this article has been replaced. Treasury confirmed the legislation passed Parliament in March 2026.
How do the thresholds and tax rates work?
For 2026–27, an additional 15% applies to relevant earnings attributable to the portion above $3 million. A further 10% applies to earnings attributable to the portion above $10 million. These are often described as headline rates of 30% and 40%, including ordinary accumulation-phase fund tax; they are not universal effective rates for every fund or asset.
Your total super balance can include interests in more than one fund. Pension and defined benefit interests require attention too. The Commonwealth Superannuation Corporation’s current overview explains the tiers and personal assessment approach.
What changed from the original proposal?
The final framework uses an earnings calculation aligned with realised income concepts rather than the original broad change-in-balance approach. The thresholds are indexed. Fund reporting, allocation and transitional capital-gains adjustments still require detailed calculations; an investment account’s cash receipts alone are not the calculation.
The 2026 amending Act sets out the rules. For the first year, 2026–27, the threshold and taxable proportions use your total super balance at year end; later years have different reference rules. Do not assume that reducing a balance just before a later 30 June will remove the tax.
What should an SMSF member prepare?
- Statements for every super interest, including defined benefits and pensions.
- Support for asset values, ownership and cost bases, including the position at commencement.
- Fund income, realised gains, losses, contributions and benefit-payment records.
- A cash-flow plan for any personal assessment, considered alongside fund liquidity.
Ask your accountant to model the position before changing contributions, selling assets or withdrawing benefits. Compare the tax outcome, transaction costs and retirement objectives together. A withdrawal also requires a lawful condition of release. Where a decision involves financial product advice, involve an appropriately licensed adviser.
Discuss your circumstances
Stewart Private Accounting helps business owners in Perth and across Australia with accounting and tax support. Contact our team to discuss the records, scope and fees for your work.
This guide provides general information current at the update date. The treatment depends on your circumstances and the applicable income or FBT year.
