Division 296 update: Legislation still pending - what you need to know

The proposed Division 296 tax, which introduces an additional 15 per cent tax on superannuation earnings for individuals with total super balances above $3 million, remains in limbo. Although the Division 296 Bill was originally introduced into the House of Representatives in November 2023 and passed into the Senate in October 2024, it lapsed in July 2025 due to the Federal election.

At the time of writing, the Bill has not yet been reintroduced into the House of Representatives, though the Government remains committed to implementing the new tax.

The next opportunity for the Bill to be reintroduced is during the late October or early November sitting. As a result, there is growing uncertainty around whether the proposed start date of 1 July 2025 will be maintained. There is also industry speculation about whether the legislation will contain any additional amendments, such as adding indexation for the $3 million threshold.

BDO comment

While the proposed start date remains 1 July 2025 for the moment, the legislation is not yet law. Acting prematurely could lead to unintended tax consequences, particularly given the complexity of the measures and the possibility of amendments before enactment.

Our superannuation team’s advice remains unchanged: exercise caution and wait until the legislation is finalised before making significant changes to your superannuation strategy. In the meantime, it’s prudent to stay informed and seek tailored advice to understand potential impacts.

For a detailed overview of the proposed measures, you can read our earlier article on Division 296 here.

If you would like to discuss how Division 296 could affect your circumstances, please contact your local BDO adviser.
 

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