The Ord Minnett
Division 296 tax calculator:
How much will you pay?
The proposed Division 296 tax is set to impact Superannuation balances exceeding $3 million, including self-managed Super funds (SMSFs). The Ord Minnett Division 296 tax calculator will help you understand how much the tax could cost you if it comes into effect.
What is the new Division 296 Tax?
Division 296 is a new tax set to be introduced by the Government. If it passes through parliament, it will apply to individuals with Superannuation balances exceeding $3 million. Any earnings attributed to the portion of a Total Superannuation Balance (TSB) over $3 million will be taxed at a flat rate of 15%. Division 296 is an additional tax on top of the existing Super fund tax. The proposed Division 296 tax means you can be taxed on unrealised gains.
It's calculated based on the increase in your Total Super Balance (TSB), even if an asset hasn’t been sold to “lock in” these gains.
It’s important to note that Division 296 hasn’t been legislated yet. However, it is widely expected to pass into law in the future. If this happens, the first assessment for Division 296 will be based on an individual's TSB at the start and the conclusion of the 2025/26 financial year (1 July 2025 and 30 June 2026, respectively). Division 296 could impact your financial strategy. That's why it's important to understand exactly how the Division 296 tax applies in your situation.
Calculate how Division 296 will affect you
Want to see how much you stand to pay under Division 296?
Enter your details into our calculator and find out:
How is Division 296 calculated?
The Division 296 tax is calculated based on the following:
Get expert advice to manage Division 296 changes
When changes like the Division 296 tax arise, it's important to get quality financial advice. That's where our team of private wealth advisers can help.
We have the knowledge and experience to provide guidance on legislative changes like Division 296. Our research teams and tax specialists work hand-in-hand to help grow your wealth.
Start a conversation with us today and take control of your personal wealth.
Division 296 Frequently Asked Questions
Who does Division 296 affect?
Division 296 will only apply to people whose Total Superannuation Balance is over $3 million at the end of the financial year. If you take money out before that date to bring your balance below the threshold, Division 296 won’t apply. However, it's important to keep in mind you may still be taxed on withdrawing funds from your Superannuation. This depends on your personal situation. Seek professional financial advice before making decisions in this area.
What counts as my Super balance?
All funds in your Superannuation account and SMSF individual member balance count toward your Super balance. Some outstanding loan amounts linked to your Super, such as a Limited Recourse Borrowing Arrangement (LRBA) might not be included.
What if my Super balance goes down?
If your Super loses value due to negative growth, the loss can generally be carried forward and offset future earnings. This can help to reduce future tax payments.
Will the $3 million threshold increase over time?
The Government does not currently plan to index the tax or adjust it for inflation. Assuming the economy continues to inflate over time, it's likely that Division 296 will apply to more and more Australians.
What are unrealised gains?
An unrealised gain is an increase in the value of an asset or investment that an investor holds, which has not yet been sold. For example, if an individual owns a property in their Superannuation fund which they purchased for $3 million, and the next financial year it is valued at $3.2 million, they will pay tax on the unrealised gain of $200,000, even though the asset has not been sold.
Under Division 296, unrealised gains can be taxed if your TSB is over $3 million.
Are some people excluded from Division 296 tax?
The Division 296 tax won't apply to everybody. For example, child pension recipients and people who have received structured settlement contributions won’t be taxed under Division 296. Some special funds are also treated differently.
Does Division 296 apply to self-managed Super funds?
Yes, Division 296 applies to SMSFs. There may be some differences for SMSFs compared to public fund members. This is due to variations in how the funds are set up. For example, public fund members may request money from their fund to cover this tax. SMSFs are entirely responsible for their own tax obligations. There are a few differences to keep in mind, but Division 296 tax liabilities are largely similar for SMSFs and public fund members.
What are the possible responses to Division 296?
Some decisions you might make in response to Division 296 are:
Withdrawing funds: If you withdraw funds prior to 30 June 2026, bringing your TSB below $3 million, you can reduce or eliminate your tax liability under Division 296. However, this strategy can result in other financial liabilities including capital gains tax or higher personal tax rates.
Alternative investment options: Given the Division 296 Tax changes, you may want to consider alternative investment options, depending on your personal financial situation. This can include investing in your personal name, using family trusts, company structures (which can have a 25% tax rate for eligible entities), or tax-effective investment bonds.
Gifting to adult children: If your goal is to maximise your children's inheritance, gifting money to your adult children may be a more tax-effective option, given the changes in Division 296.
The right way to respond to Division 296 depends on your personal financial situation. Speak with a financial adviser before making any decisions to help ensure you make the right choices for your situation.
Should I give my beneficiaries their inheritance now to avoid the tax over $3m in Super?
One method to reduce the impact of Division 296 is to gift excess funds to beneficiaries on a lower tax rate. Alternatives like family or discretionary trusts may allow you to retain control of capital while distributing income to your beneficiaries at a lower tax rate.
Insights that count
Discover the best opportunities to outperform the market. Our research team dig deep into the market, company and stock data to bring you insights others might overlook.
Division 296 Tax: What high net worth Australians need to know about the proposed $3m Superannuation changes
Australians with high Superannuation balances may soon face major changes to how their retirement savings are taxed.
Important Information
This webpage provides general information only and does not constitute financial, investment, or tax advice, and should not be relied on take make financial, investment or taxation decisions. The information is based on proposed legislation and current publicly available information as of May 2025, which may be subject to change. Individuals should seek professional advice tailored to their specific circumstances before making any decisions.
.jpg)