Division 296 is coming from 1 July 2026
Division 296 passed Parliament recently, but the good news is it affects very few Australians. Here’s a simple breakdown to help you understand the essentials.
Who is affected?
Only individuals with super balances over $3 million across all of their super accounts combined (including SMSFs and defined benefit interests).
Most Australians will not be impacted.
What are the New Tax Rates?
Division 296 introduces an additional personal tax on certain super earnings above key thresholds:
🪴 Balance under $3m - no change - 15% accumulation, 0% pension
🪴 Balance $3m - $10m additional 15% - 30% accumulation, 15% pension
🪴 Balance above $10m additional 25% - 40% accumulation, 25% pension
Important: These rates apply only to the proportion of earnings that relate to the balance above the thresholds, not your entire super balance.
When Does it Start?
🪴 1 July 2026: New rules commence
🪴 30 June 2027: First measurement date
FAQ’s: Quick answers for Busy Humans
🪴 Does this apply even if I’m in pension phase?
Yes. Division 296 is a personal tax, separate from the fund’s tax rules.
Even if your pension earnings are normally taxed at 0%, the portion of earnings linked to your balance above $3M may attract the additional 15% or 25% Div 296 tax.
🪴 Will I receive a tax assessment in my own name?
Yes - the ATO issues a personal assessment, similar to Division 293. It appears in your myGov account.
🪴 Can I pay the tax from my super?
Yes- you can elect to have the tax paid from your super via a release authority. You can choose which fund the money comes from.
🪴 Does this affect most people?
No - the vast majority of Australians have balances well below $3M. This measure targets only large balances.
🪴 Are unrealised gains taxed?
No - the final legislation taxes realised earnings only, which is a significant improvement from earlier proposals.
If you want to understand how the rules apply to your situation, or explore strategies to reduce the tax your beneficiaries may face, seeking personalised advice can make a meaningful difference.
General Advice Disclaimer - Any advice included on this website or in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation or needs