There were no major superannuation measures in the Budget, however the Division 296 ($3m super balance tax) legislation enacted in March 2026 will commence from 1 July this year.
Clients should therefore consider the broader policy announcements and their potential implications for superannuation structures and long-term planning.
Capital Gains Tax reform
Changes to the Capital Gains Tax (CGT) discount are not expected to impact superannuation funds. We understand based on third party media reporting that the one-third CGT discount will continue to apply to superannuation funds, including for the purposes of calculating Division 296 earnings.
Where a superannuation fund holds assets through a unit trust, the asset is realised at the trust level and capital gains are distributed to the fund. The Budget papers indicate that the proposed 30% minimum tax rate on capital gains should not apply to fixed trusts or superannuation funds. However, further detail will be required to confirm how indexed capital gains flowing through unit trusts to superannuation funds will be treated where the fund is entitled to apply a one-third CGT discount.
Discretionary trusts
Although superannuation funds are unlikely to be directly affected by the discretionary trust measures, it is not uncommon for superannuation benefits to pass to a testamentary trust. As testamentary trusts may be impacted by the proposed discretionary trust reforms, estate planning arrangements involving superannuation balances may need to be reconsidered.
Negative gearing reforms
While relatively few self-managed superannuation funds hold negatively geared residential property, such funds will be excluded from the negative gearing reforms commencing on 1 July 2027. As a result, the proposed changes are not expected to have a direct impact on most SMSFs.
Protecting the tax system against fraud
The Budget includes additional funding to enhance the Australian Taxation Office’s ability to detect and prevent fraud, including fraudulent access to superannuation benefits.
Protecting investors and strengthening the superannuation system
The Government intends to consult on options to strengthen the performance test overseen by APRA. The assessment under the performance test is intended to hold RSE licensees to account for underperformance.
