Treasury opens consultation for Div 296 just in time for Christmas

Earnings on balances above $10 million would be taxed at 40 per cent, a move the government said would ensure “generous” super tax breaks were “better targeted.”

Consultation on the draft bill will be open until 16 January 2026, leaving stakeholders with only 28 days to prepare feedback to the legislation, including the holiday period over Christmas and New Year’s.

“The measure we’re consulting on from today reduces the tax concessions available to individuals whose total superannuation balance exceeds $3 million,” Chalmers said in a statement.

“The amendments maintain the concessional treatment of superannuation and makes superannuation tax concessions more targeted for those with large balances.”

In October, the government moved to scrap controversial aspects of the tax, including its application to unrealised gains and the lack of indexation of the $3 million threshold.

Under the updated draft legislation, the tax would only apply to realised gains and the $3 million and newly-introduced $10 million threshold would be indexed.

Amendments in the draft bill included:

• adding a second threshold with a headline rate of 40 per cent – this rate will apply to earnings on the part of an individual’s total super balance above $10 million

• indexing the thresholds consistent with the approach for the transfer balance cap

• moving to a realised earnings approach that aligns with existing income tax concepts

• changes to exclude capital gains accrued before the start of the policy

• applying commensurate treatment to defined benefits

• delaying the start date to 1 July 2026.