Large Superannuation Balances – Further Changes!

The Federal Government have today announced some proposed changes to the controversial tax on super balances over $3 million (Division 296 tax).

These proposals are as follows:

• The tax will no longer apply to unrealised gains.
• An additional threshold of $10 million has been included, meaning the tax rates are now proposed to be:
  • Up to 30% for members with a super balance between $3 million and $10 million; and
  • Up to 40% for members with a super balance over $10 million.
• Thresholds are now to be indexed with inflation/CPI, to maintain relativity with the transfer balance cap (the $3 million threshold will index in increments of $150,000 and the $10 million threshold in increments of $500,000).
• Commencement date of the tax is targeted to start from 1 July 2026, a year later than originally slated (was previously 1 July 2025).
• The tax will also be applied to defined benefit pensions, to ensure equivalent treatment.

The proposals are just that, and there is no draft legislation to see yet. It will be interesting to see how the calculations for the new tax will change, particularly considering the removal of the unrealised gain from the proposal.

We are watching this space very closely and will release more information as it unfolds.

For further clarity on how these changes may impact you, please do not hesitate to reach out to us.
 

– Brad Sheaves

Posted 16.10.2025

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.