In a move that will spoil the Christmas break for many superannuation techies, the government has released the new Div 296 wordings for consultation. Having released it on the day when most are about to go on holidays they must have felt a certain degree of evil pleasure by announcing that consultations close on January 16th.

There will undoubtedly me much said about this in January, when everyone has had a chance to look at it in detail, but I’d like to share a couple of bullet points now. As expected,

• The implementation date is 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 CPI indexed
• The earnings calculation will only apply to realised gains.

Additional, details some of which may not have been expected are,

• The measure of the $3m and $10m total super balance is not at the end of the year. It is now the greater of the balance at the beginning of the year and the end of the year. Thankfully, in the first year, it will only be measured at the end of the year.
• Limited recourse borrowing will not be counted as it might be under certain conditions with the usual measure of total super balance.
• The tax will now be levied on the deceased. Previously the dead were excluded.
• For capital gains tax purposes, funds can elect to use the asset value at 30 June 2026 as their cost base for Div 296 tax purposes.