Lock up your superfunds – Div 296 is here!
It’s here! Effective from 1 July 2026, if your total superannuation member balance, at the end of the 2026/2027 financial year (and each subsequent year), exceeds.
$3 million (First Threshold), then you are subject to Div 296 tax of 15% on the proportion of earnings that exceed the First Threshold (being an effective tax rate of 30%); and
$10 million (Second Threshold), then you are subject to an additional Div 296 tax of 10% on the proportion of earnings that exceed the Second Threshold (being an effective rate of 40%).
The First Threshold and Second Threshold will be indexed by the consumer price index. The tax will be a personal tax liability issued on the individual member. This means that the liability is paid by you, not your superfund. Whilst the liability can be paid from your superannuation member balance, it is recommended to seek advice prior to end of financial year. Payment of the liability is due 84 days after the ATO issues a tax notice of assessment. Interest will accrue on any unpaid amount.
Next Steps
If your superannuation member entitlements exceed either the First Threshold or Second Threshold, and you hold real property as part of your member entitlements, and you are wishing to reduce your member entitlements via an in specie distribution of real property, this should be effected as soon as possible as the State Revenue Office will likely be inundated with assessments and waiting times will be substantially extended.
As regulations and ATO guidance are still being developed, prior to making significant decisions, seek legal and financial advice. For more information, see our previous articles on the Div 296 legislation or speak to a member of our team.
For more information, please contact:
Alasdair Woodford
Principal
T: 03 5225 5217 | M: 0436 456 144
E: awoodford@ha.legal
Joseph Flanagan
Senior Associate
T: 03 5226 8504 | M: 0491 307 550
E: jflanagan@ha.legal
Tayla Berger
Senior Associate
T: 03 5226 8559 | M: 0407 825 365
E: tberger@ha.legal
This article was prepared with the assistance of Philippa Duniam, Law Clerk.
