The treasurer has finally succumbed to overwhelming pressure and changed his approach to Div 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 realised gains.
More detail will be developed soon.
Congratulations to all who have fought the good fight on this, particularly Peter Burgess of the SMSF Association.
