WELCOME TO JANUARY 2026
Super Newsletter
Superannuation Shake-Up: The latest Division 296 tax draft moves closer to reality The Federal Government has released a new round of draft legislation for Division 296, targeting individuals with superannuation balances above $3 million. This follows the earlier proposal and extensive industry consultation, with taxation on unrealised gains now being removed in response to feedback from super funds, advisers and affected individuals. This latest draft, released in December 2025, is intended to commence from 1 July 2026.
Tax Rates & Thresholds Large Superannuation Balance Threshold
Proportion Calculation
Additional Tax Rate
Total Tax Rate*
$3 million
(TSB − 3,000,000) ÷ TSB
15%
30%
$10 million
What is Division 296? Division 296 introduces an additional tax on superannuation earnings for individuals whose total superannuation balance (TSB) exceeds $3 million.
Key Features Who is affected? Individuals with a TSB above $3 million at 30 June 2027. Thereafter, those exceeding the large superannuation balance at either the start or end of the income year will be subject to the additional tax, subject to some carve outs.
(TSB − 10,000,000) ÷ TSB
(TSB − 10,000,00 0) ÷ TSB +10% (on top of above)
40%
*Applies to proportion of earnings
Indexation: $3M threshold increases by $150,000 increments in line with CPI $10M threshold increases by $500,000 increments in line with CPI
Calculation Basis and CGT concession A modified taxable-income calculation is to be used for most funds, which only includes realised earnings and unrealised gains are excluded.