Update: Division 296 Super Tax
The government has announced practical revisions to its proposed tax changes for individuals with superannuation balances over $3 million.
If legislated, these changes will now take effect from 1 July 2026, with first assessments expected in the 2027–28 financial year.
Key Updates
- Implementation date: Delayed to 1 July 2026
- Indexation: Thresholds will be indexed over time
- Earnings calculation: Applies only to income and realised gains
- Two balance thresholds:
- $3 million to $10 million, earnings taxed at 30%.
- Over $10 million, earnings taxed at 40%
Why This Matters
This approach is considered fairer because it avoids taxing paper profits and aligns more closely with how other types of investment income are taxed. It also helps reduce the impact of bracket creep over time.
What You Need to Do
If your individual super balance stays below $3 million, these proposed changes won’t affect you. If you’re above or approaching the threshold, we will work with you at your next Annual Review meeting to assess your position and plan for your implications from 1 July 2026.
As we highlighted in June, superannuation will remain one of the most tax-effective investment vehicles for Australians.
If you have any questions about how this may affect your financial plan, please get in touch.
Yours sincerely,
Mackay Private Wealth
General Advice Warning: Any comments in this communication do not consider your objectives, financial situation or needs. Before acting on any general advice, consider whether it is appropriate for you.