--- title: "New tax on people who have more than $3m in their Superannuation? - Sapience Financial" description: "new tax on people who have more than $3m in their Superannuation SMSF Members may Suffer under Division 296" url: "https://sapience.com.au/resources/small-business-alerts/new-tax-on-people-who-have-more-than-3m-in-their-superannuation" date: "2026-06-17T10:15:52+00:00" language: "en-GB" --- # Small Business Alerts ## New tax on people who have more than $3m in their Superannuation? - [ small business ](https://sapience.com.au/all-tags/small-business) - [ super contributions ](https://sapience.com.au/all-tags/super-contributions) - [ SMSF liquidity ](https://sapience.com.au/smsf-liquidity) - [ small business news ](https://sapience.com.au/all-tags/small-business-news) ![](https://sapience.com.au/images/blog/news/small-business-news-updates-sapience-financial.svg) #### The Government intends to introduce a new tax on people who have more than $3m in their Superannuation. While it hasn’t yet been passed, legislation is already in Parliament to introduce this new tax and a Senate Committee has recommended it is passed. If it is, the new tax will be called “**Division 296 tax**” and will come in from 1 July 2025. - Once the Division 296 tax is in effect, any earnings on superannuation balances exceeding $3million in a financial year will be subject to an additional 15% tax, making the total tax on this portion of earnings 30%. From 1 July 2025 a new additional tax will apply to those who have a total superannuation balance (TSB) of greater than $3 million. Consequently, we often get asked the question, 'Should a client not have more than $3 million in superannuation?' **SMSF Members may Suffer under Division 296** Taxation of *unrealised gains* under Division 296 is of particular concern for SMSFs because they commonly hold *illiquid assets* like property. - Thus, members with balances close to the $3m threshold (or with investments in assets with the potential for steep increases in value) may attract a liability under the proposed Division 296 tax. - Individual members are liable for Div 296 tax costs, not the fund itself – although members can release funds from their superannuation interests or use external funds. - **Important:** This creates additional issues for SMSFs that run very low cash balances and/or who are not managing their SMSF liquidity SMSF Association (SMSFA) chief executive has said, taxing unrealised gains contained within the bill was “a tax on market movements and changes in asset values, not income, - an alarming precedent as it represents a fundamental change in how tax policy is implemented in Australia”. Consequently, some SMSF members are forced to sell large, illiquid assets to fund a Division 296 liability because the member has insufficient funds outside superannuation to pay the tax. Naturally, it is not a ‘one size fits all’ answer and it depends on many factors and assumptions. But in reality, **Division 296 tax** will force many people who, up until now, may have not yet taken a sufficient interest in the basics of investing in super - to change how they see their financial future and cultivate a closer relationship with a financial adviser. You can track the passage of this Bill through Parliament, at [https://www.aph.gov.au/Parliamentary\_Business/Bills\_Legislation/Bills\_Search\_Results/Result?bId=r7133](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7133) ## Schema ```json { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "What are Sapience Small Business Alerts?", "acceptedAnswer": { "@type": "Answer", "text": "Small Business Alerts are curated updates designed to keep Australian business owners informed about critical changes in insurance, governance, and risk management. We focus on 'Signal over Noise,' highlighting only the changes that impact business continuity and personal liability." } }, { "@type": "Question", "name": "How do these alerts help with business risk management?", "acceptedAnswer": { "@type": "Answer", "text": "By staying informed about regulatory shifts and emerging insurance trends, business owners can proactively update their Shareholders Agreements, Buy-Sell funding, and Key Person covers before a crisis occurs, rather than reacting after the fact." } } ] } ``` ```json { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home |", "item": "https://sapience.com.au" }, { "@type": "ListItem", "position": 2, "name": "Small Business Alerts", "item": "https://sapience.com.au/resources/small-business-alerts" }, { "@type": "ListItem", "position": 3, "name": "New tax on people who have more than $3m in their Superannuation?", "item": "https://sapience.com.au/resources/small-business-alerts/new-tax-on-people-who-have-more-than-3m-in-their-superannuation" } ] } ``` ```json { "@context": "https://schema.org", "@type": "Article", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://sapience.com.au/resources/small-business-alerts/new-tax-on-people-who-have-more-than-3m-in-their-superannuation" }, "headline": "New tax on people who have more than $3m in their Superannuation?", "description": "The Government intends to introduce a new tax on people who have more than $3m in their Superannuation. While it hasn’t yet been passed, legislation is already in Parliament to introduce this new tax and a Senate Committee has recommended it is passed. If it is, the new tax will be called “Division 296 tax” and will come in from 1 July 2025. Once the Division 296 tax is in effect, any earnings on superannuation balances exceeding $3million in a financial year will be subject to an additional 15% tax, making the total tax on this portion of earnings 30%. From 1 July 2025 a new additional tax will apply to those who have a total superannuation balance (TSB) of greater than $3 million. Consequently, we often get asked the question, 'Should a client not have more than $3 million in superannuation?' SMSF Members may Suffer under Division 296 Taxation of unrealised gains under Division 296 is of particular concern for SMSFs because they commonly hold illiquid assets like property. Thus, members with balances close to the $3m threshold (or with investments in assets with the potential for steep increases in value) may attract a liability under the proposed Division 296 tax. Individual members are liable for Div 296 tax costs, not the fund itself – although members can release funds from their superannuation interests or use external funds. Important: This creates additional issues for SMSFs that run very low cash balances and/or who are not managing their SMSF liquidity SMSF Association (SMSFA) chief executive has said, taxing unrealised gains contained within the bill was “a tax on market movements and changes in asset values, not income, - an alarming precedent as it represents a fundamental change in how tax policy is implemented in Australia”. Consequently, some SMSF members are forced to sell large, illiquid assets to fund a Division 296 liability because the member has insufficient funds outside superannuation to pay the tax. Naturally, it is not a ‘one size fits all’ answer and it depends on many factors and assumptions.  But in reality, Division 296 tax will force many people who, up until now, may have not yet taken a sufficient interest in the basics of investing in super - to change how they see their financial future and cultivate a closer relationship with a financial adviser. You can track the passage of this Bill through Parliament, at https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7133", "image": { "@type": "ImageObject", "url": "https://sapience.com.au/" }, "publisher": { "@type": "Organization", "name": "Sapience Financial", "logo": { "@type": "ImageObject", "url": "https://sapience.com.au/images/brand-logo/sapience-financial-square-logo.png" } }, "author": { "@type": "Person", "name": "Drew Browne", "url": "https://sapience.com.au/resources/small-business-alerts/new-tax-on-people-who-have-more-than-3m-in-their-superannuation" }, "datePublished": "2024-08-06T12:20:24+10:00", "dateCreated": "2024-08-06T12:20:24+10:00", "dateModified": "2025-04-18T10:45:27+10:00" } ```