Better Targeted Super Concessions (Division 296) is now law and applies from the 2026–27 financial year onwards.
From 1 July 2026 individuals with a total super balance (TSB) above the large super balance threshold (LSBT), set at $3 million for 2026–27, will be subject to Division 296 tax of an additional 15% on the proportion of earnings relating to their TSB exceeding the LSBT.
TSBs above the very large super balance threshold (VLSBT), set at $10 million for 2026–27, will also be subject to an additional 10% tax on the proportion of earnings exceeding the VLSBT.
Division 296 does not change your obligations as a self-managed super fund (SMSF) auditor. Accurate reporting and existing audit requirements remain important because they support Division 296 calculations.
When auditing an SMSF, check that:
- sufficient and appropriate audit evidence supports the market value reported for each fund asset
- trustees have allocated investment returns to members on a fair and reasonable basis.
Regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 (SISR) requires trustees to value SMSF assets at market value when preparing the fund's accounts and statements. If you cannot obtain sufficient and appropriate evidence, consider whether you need to modify the independent auditor's report (IAR) and lodge an auditor contravention report (ACR) where the reporting criteria are met.
Regulation 5.03 of the SISR requires trustees to determine investment returns credited or debited to members’ benefits on a fair and reasonable basis. If the fund does not meet this requirement, consider whether you need to modify the IAR. Regulation 5.03 is not reportable for ACR purposes, although you may include other relevant concerns in Section G of the ACR.
Review our guidance on Division 296 tax for SMSFs and verifying the market value of fund assets.
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