When does Division 296 start and what rates apply?

It applies from 1 July. Earnings linked to balances above $3 million are taxed at 30 percent, and 40 percent above $10 million. Treasury expects fewer than 0.5 percent of balances to be affected, but planning changes for many families with SMSFs or large APRA fund accounts.

Do I need an SMSF to be impacted by Division 296?

No. The rules apply across super, including APRA-regulated funds. Impact depends on your total super balance. However, SMSF strategies can offer more control over asset location, timing of realised gains, and cash funding. Many trustees are reviewing spouse splits, contributions pacing, and entity structures.

What are common division 296 tax strategies in Australia?

Popular moves include rebalancing across spouses, shifting new contributions to a lower-balance member, staging asset sales across years, and holding some growth assets in a trust or company. The aim is to smooth tax, keep liquidity, and align income streams with family tax positions.

How do the low-income super offset changes help?

The low-income super offset is being lifted from 1 July to boost outcomes for workers on modest wages. It reduces the contributions tax burden for eligible members. To benefit, keep your details current with your fund and confirm employer payments are timely.

Law and Government

Division 296 Tax March 14: Senate Pass Triggers SMSF Workarounds, LISTO Lift

ByDanny Kontos March 14, 2026

Division 296 tax strategies matter now that the Senate passed the reforms on 14 March. From 1 July, tax on super earnings above $3 million rises to 30 percent, and 40 percent above $10 million. Fewer than 0.5 percent of balances are hit, yet planning shifts for many families. We explain what changed, why SMSF moves are building, and how the low-income super offset lift supports workers. Use these steps to reassess asset location, timing of gains, and cash flow.