The Federal Government has announced major adjustments to its proposed Division 296 superannuation tax, removing the tax on unrealised gains, introducing a tiered rate structure, and delaying the start date to 1 July 2026.

What’s changing

After more than two years of industry feedback and review, the Government has confirmed that:

• The tax will apply only to realised gains, not unrealised gains.
• A tiered structure will replace the previously proposed flat 15% additional tax :
  • 30% for super balances between $3 million and $10 million
  • 40% for balances above $10 million
• Both thresholds will be indexed annually to avoid bracket creep.
• The start date is now 1 July 2026, giving Treasury time to finalise how the new tax will be calculated and applied.

These updates mean the earlier version of Division 296, which would have taxed unrealised gains and wasn’t indexed, will not proceed.

What this means for you

For members and trustees with balances above $3 million, this is a more balanced and practical outcome.

Tax will now apply only to realised earnings, and indexation will ensure fewer people are affected over time.

The delayed start date provides time to review strategies and make any adjustments ahead of the new rules.

CIB’s view

We see today’s announcement as a sensible and positive step that restores fairness and certainty to the superannuation system.

Removing the tax on unrealised gains and introducing indexation reflects constructive engagement with industry feedback.

That said, finer details on how realised gains will be calculated and attributed are still to come.

Our team will review the draft legislation once released and provide further guidance for our SMSF clients and members with larger balances.

A more moderate, indexed, and tiered approach will now take effect from 1 July 2026.

If you’d like to understand what this means for your SMSF, contact the CIB Super Team.