In this episode, we dive into the major revisions recently announced for the proposed Division 296 tax — the government’s plan to impose extra tax on earnings from very large superannuation balances. Under the revamped proposal:

• Unrealised gains are out: only realised earnings (interest, dividends, rent, and capital gains when sold) will be taxed — removing a thorny compliance issue.

• It introduces a tiered tax structure rather than a flat surcharge:
  • Balances between $3 million and $10 million: taxed at an effective 30 % (i.e. 15 % base + 15 % additional)
  • Balances above $10 million: taxed at 40 %

• Thresholds will be indexed to inflation to avoid “bracket creep.”

• The start date is delayed from 1 July 2025 to 1 July 2026, giving more time for planning.

• The first assessments will be based on totals at 30 June 2027, with implementation in the 2027-28 financial year.

We also unpack what these changes mean in practice — the benefits (like reduced complexity and lower risk of forced sales), the potential downsides for ultra-high net worth holders, and the strategic moves individuals and advisers should be considering now.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Independent Wealth Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content.