As you’d already know, Better Targeted Super Concessions (Division 296) is now law and comes into effect for the 2026–27 financial year onwards.
This means, from 1 July 2026 individuals with total super balances 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 exceeding the LSBT.
On top of this, super balances above the very large super balance threshold (VSLBT) (set at $10 million for 2026–27) will be subject to an additional tax of 10% on the proportion of earnings relating to their TSB exceeding the VLSBT.
Be ready
Super funds will need to calculate the relevant super earnings for their members that have a TSB exceeding the LSBT (in-scope members) and report them to the ATO.
You can find out everything you need to about how Division 296 affects individuals and how it affects super funds.
Here are some things you should be prepared for:
- If you’re an APRA fund responding to requests for information via Online services for business, we expect to issue requests to defined benefits funds in November 2027. All other APRA regulated funds can expect requests in April 2028.
- Small APRA funds (SAFs) will need to consider opting in for the CGT adjustment for Division 296 tax. The election will apply to all CGT assets held on 30 June 2026 and cannot be revoked. Your members do not need to be over the LSBT to opt in for this adjustment. You will need to make your election by the due date of your fund's 2026–27 Income Tax Return.
- Division 296 Notices of assessment for the 2026–27 income will issue in the latter half of 2027–28. Your member may elect to release money from your super fund to pay their Division 296 tax liability.
We strongly recommend you take advantage of the information on our website to prepare. We are currently drafting law companion rulings to help funds calculate their In-scope members' relevant super earnings.
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