Will The Federal governments radical new division 296 tax on superannuation funds, start on 1 July or not?

The Federal Government was unable to pass the Division 296 superannuation tax bill before the upcoming election was announced. As a result, the proposed changes have now become an election issue.

The Coalition had already indicated it would not proceed with this measure if elected, adding further uncertainty to the bill’s future.

Interestingly, the recently released Federal Budget still includes projected revenue from the proposed ‘$3 million super tax’. This indicates the Labor Government remains committed to introducing the legislation, with the original start date of 1 July 2025 still in sight.

For individuals with large self-managed superannuation funds or large super balances, our advice has consistently been to take a 'wait and see' approach - waiting for clarity on how and when the tax will be imposed before making any irreversible decisions.

Now that the bill has not passed, and any future version would need to be reintroduced by the next government, both the rules and the timing remain up in the air.

If you’d like to discuss how these proposed changes may affect your fund, please get in touch with our superannuation team or your Hall Chadwick adviser for more information.