Everyone argued about the $3 million super tax. Almost nobody read what actually passed. Division 296 is now law, it commenced on 1 July 2026, and the version on the statute book is meaningfully different from the version that caused all the noise — which means a lot of people are still planning around rules that were dropped. In this episode, Mia and Leo are joined by tax strategist Harvey Green to walk through what Division 296 actually does, who it reaches, and the one deadline that has already quietly passed. If your super balance is anywhere near $3 million, or you're an SMSF trustee, this is the one to listen to before you make a move. In this episode, we cover: It's Law, and It's Already Running: Division 296 commenced 1 July 2026, so the first year it applies to is the one we're in now. First assessments go out after 30 June 2027. How It Actually Works: An extra 15% on the portion of your earnings attributable to a balance above $3 million, plus a further 10% above $10 million — and why this is a tax on earnings, not on your balance. The Numbers, Worked Through: A $3.5 million balance with $200,000 of earnings sees about 14% caught, for roughly $4,300. A $6 million balance with $400,000 of earnings sees half caught, for $30,000. It scales — one dollar over the line is not a cliff. What Counts in Your Balance: Every super interest you hold across every fund, including defined benefit — plus the useful carve-out for limited recourse borrowing arrangement amounts. The Unrealised Gains Backflip: The design that would have taxed you on paper gains did not become law. Fund earnings are built from an adjusted amount of the fund's taxable income, which changes everything for funds holding a farm, a commercial property or business premises. Indexation: Both thresholds move — $150,000 increments on the $3 million and $500,000 on the $10 million, tracking the transfer balance cap. The CGT Election, and the Date That's Already Gone: SMSFs can reset the cost base of their assets to market value as at 30 June 2026, so pre-existing growth isn't caught. The election is made later, but the valuation date has passed — and it's all assets, one deadline, and it cannot be revoked. Plus the carve-out that catches people out: it generally only reaches directly held assets, not what you hold through a unit trust. What Trustees Must Do: Reporting through the SMSF annual return from 2026-27, when an actuary is required, and what happens if you don't report. Who Pays, and How: The assessment comes to you personally, not the fund — and you can either pay it yourself or have it released from your super. Five Myths, Busted: Is it a tax on your balance? Does it hit unsold gains? Will the thresholds freeze? Is one dollar over a cliff? And the most expensive myth of the five — that there's nothing you can do about it. The Honest Comparison: This stacks on the 15% the fund already pays, taking you to 30%, or 40% at the top tier, against a top marginal rate of 45% plus Medicare. Super is still the lower-taxed environment — but the gap has narrowed, and pulling money out purely to dodge this can leave you worse off. The rules that passed are not the rules people argued about. Don't plan around the wrong ones. Connect with Aevum Accounting: Is your balance near the threshold, or are you a trustee unsure what you need in place? Visit aevumaccounting.com.au to book a planning session with the expert team today. Shoutout: A massive thank you to Sam for the fantastic 5-star review! Important Disclaimer: The information shared in this episode and description is for general informational purposes only and does not constitute specific tax or financial advice. Everyone's situation is unique, and tax laws are complex. For personalized advice tailored to your specific situation, we always recommend consulting with a qualified professional at Aevum Accounting.
