The Federal Government has announced some significant changes to the proposed Division 296 tax after receiving significant feedback from industry and super groups.

This controversial tax was initially proposed to commence from 1 July 2025 and tax an additional 15% on all realised and unrealised income for those with balances over $3 million.

Once again, nothing has formally been legislated but the Federal Government has committed to the following changes: 

• The commencement date of these regulations will be deferred by one year until 1 July 2026
• A two tier threshold is proposed with an additional 15% owing for those with member balances between $3 million to $10 million and an additional 25% for those with balances above $10 million
• These member thresholds will not be fixed and will be indexed over time as per inflationary figures
• Unrealised gains will not be taxed and although there is no details yet, the measure will now only tax members on realised earnings.
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These changes have been welcomed as a fair compromise and hopefully the actual legislation will be released well before the implementation date of 1 July 2026 to allow impacted members to review and determine their appropriate response.

If you have any queries on these changes or need help with your superannuation, please do not hesitate to contact us.