The $3 million super tax is four months old: how Division 296 works, and what to check before 30 June 2027
The extra tax on earnings from super balances above $3 million, known as Division 296, has applied since 1 July 2026, with a higher rate above $10 million. The first year's balances will be tested at 30 June 2027 and the ATO will start issuing assessments in 2027-28. This report explains how the tax works now that it is law, the one-off choice open to self-managed funds, and the questions to settle with an adviser while there is still time.
After three years of debate and two designs, the tax on large superannuation balances is no longer a proposal. It became law in March 2026 and has applied since 1 July. The 2026-27 financial year is the first year it counts, which means the decisions that shape the first bill are being made now, and many of them cannot be undone after 30 June 2027.
This report explains, in plain terms, how Division 296 now works: who it reaches, how the tax is calculated, why the switch to realised earnings matters, what the one-off cost base election for self-managed super funds means, and when the ATO will send the first assessments. It includes worked examples at $4 million and $12 million, and a checklist of questions to take to your fund, accountant or adviser before the end of the financial year.
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