What is Division 296 and when does it start?

Division 296 lifts the tax on super earnings to 30% above $3 million and 40% above $10 million. It applies to realised gains only. The rules start on 1 July 2026, so the 2025–26 financial year remains under current settings. Plan early to manage liquidity and timing.

How will SMSF members above $3 million be taxed?

Earnings inside the fund that you realise after 1 July 2026 are taxed at 30% above $3 million and 40% above $10 million. This includes interest, rent, dividends, and realised capital gains. Keep good records, manage turnover, and ensure enough cash to meet any additional assessment on time.

Are low-income workers affected by these changes?

The reforms include higher offsets for low-income workers, which help boost super outcomes. These changes are separate from the higher rates on large balances. If your balance is well below $3 million, your fund’s usual tax settings still apply, and the offset changes may improve your net contributions.

What practical division 296 tax strategies should I consider now?

Review asset turnover, plan which assets should compound inside versus outside super, and check contribution and pension settings. Build a cash buffer in your SMSF, and review timing for any sales you already intend. Consider family trusts, companies, or investment bonds, but only with licensed advice and full after‑tax modelling.

Global Market Insights

March 14: Division 296 Super Tax Passes; Strategies Emerge for Wealthy

ByDanny Kontos March 14, 2026

Division 296 tax strategies matter now that the Senate has passed Australia’s 2026 super reforms. From 1 July 2026, earnings on super balances above $3 million face a 30% rate, rising to 40% above $10 million, calculated on realised gains only. Low‑income workers get higher offsets. We explain what changes mean for SMSFs and large APRA funds, why portfolios may shift, and which practical steps wealthy Australians can consider with their advisers before the new rules begin.