After what seems like years of discussions about the proposed Div296 tax on large super balances, this week a few changes have been made which seem to address the main concerns.

The good news is that the tax will no longer tax unrealised gains (this was potentially going to give some cashflow issues), and the thresholds will be indexed every couple of years (avoiding funds creeping into the system as markets rise).

In summary, for balances over $3m there will be an additional 15% tax on earnings and there is an additional proposed 10% tax on earnings for balances over $10m. These limits are per member.

There is no detailed draft legislation as yet, just an announcement and a factsheet, so the nitty gritty is not yet known. IF legislated it will not come into force until 1 July 2026 so the first important date will be 30 June 2027.

As things progress we will keep you updated.

Lindsay