“There’s been lots of discussions around the proposed implications of the Division 296 tax measures,” Dunn told SMSF Adviser.

“The pendulum has swung fairly intensively over the last few months around where the government thought it was going to go and the impact of the advocacy work that the SMSF Association and others have done with various crossbench senators.”

Dunn flagged that the final legislation (should it become law) could change compared to its original form.

“The changes could be minor but equally, it could include a change in methodology altogether whereby the concept of the total superannuation balance and including unrealised gains change as well through advocacy and trying to understand the impact. Therefore, the way in which we’ve tried to understand it is completely revised,” Dunn said.

“What I would say to advisers is they don’t want to be going too early with making changes for their clients until we have a full understanding of it. At this point, it is still unresolved.”

A critical component of the change is to alter the definition of the total superannuation balance for everyone, including those with less than $3 million.

In a recent analysis piece on SMSF Adviser, Heffron director Meg Heffron said that while this change will not impact many people, it will mark a significant change for others who might find other rules dependent on total super balance (such as their ability to make non-concessional contributions) are also impacted. Moreover, it would come into effect from 30 June 2025, which would impact contributions as early as 2025–26.

The bill is currently sitting in the lower house, where a second reading was agreed to in May this year. It will proceed to the Senate, where the government (25 seats) will require support from the Greens (11 seats), as well as independent and minor parties (nine senators) to overcome the opposition (31 seats).

SMSF Association CEO Peter Burgess told SMSF Adviser last week that crossbench support for the tax is “certainly not guaranteed” as there are “growing concerns” among senators about the unintended consequences of taxing unrealised capital gains.

The Coalition recently declared that it would reverse the proposed Division 296 tax if it won the next election.

Shadow assistant treasurer Luke Howarth said at a Financial Services Council breakfast that superannuation is a good investment vehicle for retirement purposes and for reducing tax, and is not something to which he was looking at making significant changes.

Dunn stated that the proposed legislation is a risk management issue for advisers and their SMSF clients.

“There are individuals that will be unhappy with this law in its current form if it proceeds on that basis,” he said.

“Some people may look to restructure their affairs off the back of it. But advisers would need to balance that out. If a change of government occurs at the next election, and you are withdrawing any amount but your balance is above what is currently $1.9 million, then you’re not going to be able to get that money back in.”

He also pointed out that a change of government may not necessarily result in a repeal or drastic change in the law because that will depend on the balance of power in both houses of Parliament.

At the Technical Strategy Day this year, Dunn will outline the state of play on Division 296 and other legislative and regulatory developments that could impact SMSF clients.

He will also explore recent ATO public rulings, decision impact statements, and private binding rulings, along with case law that has impacted the SMSF sector, including non-arm’s length income/expenses, and super death benefits.

To hear more from Aaron Dunn about how to navigate the ever-changing SMSF landscape, come along to the SMSF Adviser Technical Strategy Day 2024.

It will be held in the following locations:

Tuesday, 15 October, at Blackbird, Brisbane.

Tuesday, 22 October, at Rydges, Melbourne.

Thursday, 24 October, at Shangri-La, Sydney.

Click here to book your tickets and make sure you don’t miss out!

For more information, including agenda and speakers, click here.

This conference is produced by Captivate Events. If you need help planning your next event, email director Jim Hall at This email address is being protected from spambots. You need JavaScript enabled to view it.