May 23, 2025
Division 296 Tax: What you need to know
DIVISION 296: WHAT THE PROPOSED SUPER TAX MEANS FOR BALANCES OVER $3 MILLION
From 1 July 2025, individuals with superannuation balances exceeding $3 million may be subject to an additional tax under proposed changes known as Division 296. If the legislation is passed by the Senate, an extra 15% tax would apply to the earnings attributed to the portion of a person’s Total Superannuation Balance (TSB) above $3 million. This would be in addition to the existing 15% tax on concessional earnings already paid within superannuation funds. For high-balance super holders, this could result in a combined tax rate of up to 30% on some of their superannuation earnings. The proposed tax could significantly influence long-term retirement planning—especially for individuals and self-managed super funds (SMSFs).
HOW DOES DIVISION 296 WORK?
Division 296 introduces a new 15% tax on earnings linked to the portion of a super balance above $3 million. What sets it apart is how earnings are calculated: the measure includes both realised and unrealised gains. In other words, you could be taxed on increases in asset values even if those assets haven’t been sold.
To help you understand how this tax may affect you, we’ve compiled a list of frequently asked questions covering key topics such as eligibility, calculation methods, reporting obligations, and payment options. We’ve also provided a Tax Calculator To help you work out what the implications could be for you.
Important disclaimer
Emanuel Whybourne & Loehr Pty Ltd (ACN 643 542 590) is a Corporate Authorised Representative of EWL PRIVATE WEALTH PTY LTD (ABN: 92 657 938 102/AFS Licence 540185).Unless expressly stated otherwise, any advice included in this email is general advice only and has been prepared without considering your investment objectives or financial situation.
There has been an increase in the number and sophistication of criminal cyber fraud attempts. Please telephone your contact person at our office (on a separately verified number) if you are concerned about the authenticity of any communication you receive from us. It is especially important that you do so to verify details recorded in any electronic communication (text or email) from us requesting that you pay, transfer or deposit money, including changes to bank account details. We will never contact you by electronic communication alone to tell you of a change to your payment details.
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The information in this podcast series is for general financial educational purposes only, should not be considered financial advice and is only intended for wholesale clients. That means the information does not consider your objectives, financial situation or needs. You should consider if the information is appropriate for you and your needs. You should always consult your trusted licensed professional adviser before making any investment decision.
Emanuel Whybourne & Loehr Pty Ltd (ACN 643 542 590) is a Corporate Authorised Representative of EWL PRIVATE WEALTH PTY LTD (ABN: 92 657 938 102/AFS Licence 540185).Unless expressly stated otherwise, any advice included in this email is general advice only and has been prepared without considering your investment objectives or financial situation.
There has been an increase in the number and sophistication of criminal cyber fraud attempts. Please telephone your contact person at our office (on a separately verified number) if you are concerned about the authenticity of any communication you receive from us. It is especially important that you do so to verify details recorded in any electronic communication (text or email) from us requesting that you pay, transfer or deposit money, including changes to bank account details. We will never contact you by electronic communication alone to tell you of a change to your payment details.
This email transmission including any attachments is only intended for the addressees and may contain confidential information. We do not represent or warrant that the integrity of this email transmission has been maintained. If you have received this email transmission in error, please immediately advise the sender by return email and then delete the email transmission and any copies of it from your system. Our privacy policy sets out how we handle personal information and can be obtained from our website.
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