Division 296 starts measuring on 30 June 2027. This prices what it costs you.

The tax that passed is not the tax people are arguing about. Both facts cost money.

Division 296 applies to roughly 56,547 people — about 4.7% of the superannuation population — and the public conversation about it is still largely about the 2023 exposure draft. Unrealised gains were in that draft. They are not in the Act. The thresholds were not indexed in that draft. In the Act, both index to CPI: $3,000,000 in $150,000 increments and $10,000,000 in $500,000 increments.

What is in the Act is arithmetic almost nobody has run on their own numbers. Your total super balance reference amount, minus $3,000,000, divided by that reference amount, gives a percentage. That percentage of your realised superannuation earnings for the year is taxed at 15%, with a further 10% above $10,000,000. On a $4,000,000 balance the taxable proportion is 27.72% and the first year's liability is $6,357 — which is a long way from what most people assume when they hear "a tax on balances over three million".

The single most expensive misunderstanding: the retirement phase is not a shelter. Net exempt current pension income is added back in working out Division 296 earnings, so a fund paying no income tax at all has exactly the same Division 296 earnings as an identical fund that is not in pension phase.

What it works out

• Year by year, not one year. Division 296 compounds through a balance, and the first year is almost never the expensive one. The projection runs forward through the thresholds as they index.
• The 30 June 2027 transitional rule, correctly. For the 2026-27 income year and no other, both whether it applies and what proportion is taxable are decided by your balance at the end of the year. From 2027-28 the reference is the greater of the opening and closing balance.
• The SMSF cost base reset election, called either way. All assets or none, once, by 15 May 2028. It is worth a great deal to some funds and nothing at all to others, and the difference is not obvious by inspection.
• Whether to withdraw before 30 June 2027. Frequently the answer is no — Division 296 takes a member entirely in accumulation to 40% on earnings at its very worst against a top personal rate of 47% — and this will say so where that is the answer.
• Every lawful response, ranked. Withdraw, restructure, equalise between spouses, change turnover, stop contributing, or do nothing, each priced on one measure.

What the full report adds

1. 10 responses priced against each other, over the projection rather than in a single year, with the spread between the best and the worst stated in dollars.
2. How the fund splits earnings between members, which is where an SMSF with two members and one large balance produces answers nobody expects.
3. Turnover, the lever nobody mentions. Division 296 taxes realised earnings, so how often the portfolio turns over changes the liability without changing the return.
4. The paying decision. Your own money or a release authority from the fund, within 60 days, priced both ways.

What it will not do

It is not financial product advice or tax advice, and it does not recommend a response. What your funds actually realise in a given year is not knowable in advance, so a projection is a projection: the report shows the working and the assumptions rather than a single confident number. The Australian Taxation Office assesses Division 296 from what your funds report, and it is the only body that can tell you what you actually owe. Everything here runs on the Act as it commenced on 1 July 2026, when Division 296 commenced.