Major Changes to Div 296!

The treasurer has finally succumbed to overwhelming pressure and changed his approach to Division 296 as per this announcement.

Essentially the following changes have been made to the proposed legislation:

• The implementation date has been delayed by a year to 1 July 2026

• There will be two caps, $3m and $10m 

  • The tax rate applied to earnings on balances between $3 million and $10 million will be 30 per cent.

  • The tax rate applied to earnings on balances over $10 million will be 40 per cent.

• Both caps will be indexed

• The earnings calculation will only apply to income and realised gains (not unrealised gains).

More detail will be developed soon.

Source: SMSF Alliance 13 October 2025