Article written by Sarah Davie
Associate Director & Licensed SMSF Accountant
Division 296 introduces a new tax on earnings associated with super balances above $3 million.
The following case studies illustrate how the Division 296 tax may apply in practice.
Case Study 1 – SMSF Holding Commercial Property
David operates a business and holds $4.5 million in super through an SMSF that owns the commercial property used by his company.
- Annual earnings: $180,000
- Amount above threshold: $1.5 million
- Proportion above threshold: 33%
- Taxable earnings: $59,400
- Additional Division 296 tax (15%): $8,910
Case Study 2 – Couple with Unequal Super Balances
- Michael has $4.2M in super while Sarah has $800k.
- Because Division 296 applies per individual, Michael may face the additional tax while Sarah does not.
Case Study 3 – Long‑Term SMSF Property Investment
Jenny’s SMSF purchased a property in 2008 for $900,000. It is now worth $3.5 million.
Division 296 legislation allows a cost‑base reset for assets held prior to 30 June 2026, potentially
reducing future taxable gains associated with the new tax rules.
Case Study 4 – Investor Approaching the Threshold
Andrew currently has $2.8M in super. Continued investment growth may push his balance above the
Division 296 threshold in future years.
Understanding these scenarios helps trustees assess whether the Division 296 tax may affect them.
Read more on why Expert Guidance Matters here. Still got questions?
Our highly experienced and local SMSF team can walk you through the process and help you understand
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Book a Free SMSF Strategy Session with Rogerson Kenny’s SMSF specialists today.
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*Disclaimer: This article is general information only and does not take into account your personal circumstances. Always seek professional advice before making financial decisions.*
Sarah Davie is an Associate Director and Licensed SMSF Accountant at Rogerson Kenny Business Accountants. She specialises in Self-Managed Super Funds and advises trustees on compliance, strategy and superannuation legislation.
