Understanding Division 296: How to Prepare for the New $3M Super Tax

Division 296, the new superannuation tax, has now been passed by Parliament and will commence from 1 July 2026. If your total super balance exceeds $3m, you will be caught by the new tax and pay up to an extra 15% on the earnings allocated to you. If your balance is greater than $10m, an additional 10 tax applies on the earnings. This tax will be assessed directly to you, not your fund.

The introduction of Division 296 has sparked plenty of questions among individuals with substantial superannuation balances, and those who may soon reach that threshold.

In this video, Vincents Superannuation Advisory Directors Brett Griffiths and Mailene Wheeler break down what Division 296 is, who may be impacted, and the practical considerations for clients now that the legislation is in effect.

Watch the conversation to understand:

• what is Division 296 and how is it calculated
• who may be affected now, and who could be affected in future
• why the one-time only cost base adjustment is important, even for members under the $3M cap
• definitions of Total Super Balance (TSB) and Div 296 earnings
• why timing, balances and investment movements matter
• what information you may want to review before making any decisions

If you’d like help understanding how Division 296 could apply to your position or you’d like us to model potential outcomes, please contact our Superannuation team. We can provide clarity on your current status, future exposure, and the key considerations for your strategy.