After years of consultation and debate, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 has passed Parliament. For high-net-wealth (HNW) Australians, the landscape of superannuation tax has been permanently altered, effective July 1, 2026.
The good news? The unrealised gains tax, which threatened to tax paper profits on unsold assets, was stripped from the final bill. The challenge? A new, tiered tax system that increases the burden on large balances.
The New Tiered Reality
Starting in the 2026-27 financial year, your super earnings will be taxed based on where your Total Superannuation Balance (TSB) sits:
- Below $3 Million: No change. Earnings continue to be taxed at the concessional 15%.
- $3 Million to $10 Million: Earnings attributable to this portion face an additional 15% tax (Total 30%).
- Above $10 Million: Earnings attributable to this portion face an additional 25% tax (Total 40%).
Crucially, these thresholds will now be indexed to inflation, preventing bracket creep from drawing more Australians into the net over time.
The “Cost-Base Reset” Opportunity
Perhaps the most critical technical detail for SMSF trustees is the once-off CGT cost-base reset.
To ensure the new tax only applies to future growth, the law allows SMSFs to elect to reset the cost base of their assets to their market value as of June 30, 2026. This ensures that the massive capital growth many funds have seen over the last decade isn’t unfairly captured by the new higher rates when those assets are eventually sold.
The Stewart & Smith Strategic Checklist
With the law now finalised, our hands-on quarterly approach shifts from speculation to execution. If you have a high-balance SMSF, your 2026 roadmap should include:
- Valuation Accuracy: Obtain up-to-date, professional appraisals for all unlisted investments and property by June 30, 2026, to set your Day 1 baseline.
- The Reset Election: Work with us to determine if the cost-base reset is beneficial for your specific fund. This is an irrevocable election that must be made by the time you lodge your 2026-27 return.
- Spouse Balancing: Review the distribution of assets between spouses. Keeping two balances under $3M is now significantly more tax-efficient than one balance at $6M.
- Liquidity Planning: Even without the unrealised gains tax, a 30%–40% tax rate on realised profits requires a sharper focus on cash flow management within the fund.
Division 296 is no longer a proposal; it is a reality. At Stewart & Smith, we specialize in removing this complexity so you can stay focused on your long-term vision. Let’s ensure your transition into this new era is seamless.
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