Division 296 tax thresholds and interest

Division 296 thresholds

From 1 July 2026, Division 296 tax reduces the tax concession for individuals whose TSB exceeds the large super balance threshold (LSBT).

You may be liable for Division 296 tax if your total super balance (TSB) exceeds certain thresholds. Division 296 tax is imposed at a rate of:

• 15% on the proportion of your taxable super earnings relating to your TSB that exceeds the LSBT, and
• an additional 10% on the proportion of your taxable super earnings relating to your TSB that exceeds the very large super balance threshold (VLSBT).

The thresholds are subject to indexation in line with the consumer price index, in increments of $150,000 for the LSBT and $500,000 for the VLSBT.

For Division 296 tax purposes, limited recourse borrowing arrangement amounts are excluded from your TSB.

Table 28: Division 296 thresholds

Income year	LSBT	VLSBT
2026–27	$3,000,000	10,000,000

For more information, see Division 296 tax

End of year interest

Where Division 296 tax relates to defined benefit interests that you have not taken an end benefit from, payment of the tax is deferred until a super benefit is paid from the interest. We must keep a debt account for each defined benefit interest where there is an amount of Division 296 tax that has been deferred.

At the end of each income year, interest is applied to Division 296 deferred debt accounts at the long term bond rate (average 10-year Treasury bond rate).