On the final day of Parliament for 2024, the Senate moved to split the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 to isolate the controversial Division 296 measure.
In its current form, Division 296 would impose an additional 15% tax on superannuation balances exceeding $3 million. This legislation could present significant complications for super investment strategies, particularly for self-managed super funds.
The Self-Managed Super Fund Association (SMSFA) has heavily opposed the Bill and has pushed amendments which would soften its impacts. SMSFA CEO Peter Burgess believes that it is now “improbable” that the Bill will pass in its current state ahead of the 2025 Federal Election.
“Concerns about the design of this tax appear insurmountable without a substantial overhaul of the bill,” says Burgess.
“If the Government intends to take this measure to the next election, the considerable backlash it has attracted makes it a formidable challenge.”
The final sitting of Parliament prior to the election is scheduled for February 2025. It is likely that Division 296 will be considered in the agenda, be that in its current form or amended.
There is no clear answer on what effects this Bill will have if passed, but it will certainly impact investment strategies for SMSFs and high performing super funds.
As SMSF accountants and advisers, Optima Partners will closely monitor this Bill, and remains committed to addressing the superannuation challenges of our clients.
