Tax Planning
Division 296 & Very Large Super Balances: What High-Net-Worth Individuals Need to Know
Changes in super taxation now affect earnings above a $3 million threshold—and an extra charge over $10 million. Essential reading for those with large super balances.
By NomadicTax Research Team • 5-8 min read • July 13, 2026
## Overview: What is Division 296 Tax?
From **1 July 2026**, an additional tax under **Division 296** will apply to super earnings for those whose **Total Super Balance (TSB)** exceeds **$3 million** at year end. If TSB exceeds **$10 million**, an additional tax applies on earnings over that higher threshold. Importantly, **only the earnings portion** above threshold—not the full balance—are taxed. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
## Key Details & Rates
- **LSBT (Large Super Balance Threshold):** $3,000,000; earnings above this taxed at **15%**. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
- **VLSBT (Very Large Super Balance Threshold):** $10,000,000; earnings above this taxed at **25%** total (i.e. additional 10% on earnings above $10 million, besides the 15% on earnings between $3 million and $10 million). ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
- Applies if your TSB is above the threshold **either just before the start of the year** or **at the end**—the greater of the two balances is used. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
## Who is Impacted?
- Individuals with **SMSFs** containing large balances, or those with multiple super funds whose total across funds exceeds thresholds.
- APRA regulated funds will report relevant earnings on high-balance members; SMSFs must do similarly if applicable. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
- Even if your super fund is under $3 million, remember contributions or transfers that push you over are relevant for future years.
## Examples
- Sarah has a TSB of $3.5 million at year end: only earnings linked to the $500,000 above $3 million will be taxed at 15%. Earnings for balances below $3 million are taxed as normal.
- Mark has $11 million; the $7 million between $3–$10 million is taxed at 15%, and the $1 million above $10 million is taxed at **25%**. Earnings on first $3 million are unaffected by Division 296.
## Planning & Actions for Large Balance Holders
- **Track all super accounts:** consolidate if needed to avoid surprises from split balances.
- **Estimate earnings:** work with fund manager to model earnings under various return assumptions.
- **Consider investment structuring:** e.g. tax-exempt components, or adjusting exposure toward income types vs capital gains, given different earning treatments by your fund.
## Administration & Timing
- Notices of Assessment under Division 296 for the **2026–27 financial year** will be issued in the latter half of **2027–28**, after funds report relevant earnings. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
- LSBT and VLSBT thresholds will be indexed annually to CPI in future. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
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**Conclusion:** If your super is large or nearing the $3 million mark, this change deserves attention now. Proper tracking, planning, and consulting with professionals can reduce unexpected tax burdens.