The Division 296 tax bill, tabled just days before the SMSF Association’s National Conference, placed the reform at the centre of discussions on client impacts, advice strategies, and long-term planning.
Commenting on the legislation, SMSF Association CEO, Peter Burgess welcomed several technical amendments, that the Association had called for in its submission and were reflected in the Bill – particularly those relating to the treatment of legacy capital gains and the calculation of a fund’s superannuation earnings attributable to in-scope members.
In her plenary session, Meg Heffron of Heffron Consulting outlined what the updated design of Division 296 could mean for high-balance clients and the importance of careful modelling and planning.
“Division 296 v2.0 is very different to the original proposal,” Heffron said. “For many clients there’s no immediate need to rush for the exits but the timing of asset sales, withdrawals and the use of losses will now matter more than ever.”
Later in the program, Sladen Legal Principal Phil Broderick addressed the structural and legal implications of the proposed tax, while cautioning advisers to carefully consider the broader consequences of any restructure while the legislation remains in draft form.
“Before implementing any strategy, advisers must remember that this legislation has not yet been enacted and could change before it is,” Broderick said. “There are also significant non-Division 296 consequences to consider, from SMSF tax and stamp duty through to estate planning and death benefit outcomes.”
These strategic discussions were supported by the foundational technical session delivered the day before by SMSF Association Technical Manager Fabian Bussoletti, who provided a comprehensive overview of how Division 296 will operate in his session, titled Division 296 Tax: On the Pulse.
“The mechanics matter,” Bussoletti said. “From the revised Total Superannuation Balance definition to the attribution of earnings and the cost base adjustment election, SMSF professionals will need to understand how these rules interact in practice.”
Conference sessions also examined how the proposed tax is already reshaping the way advisers and accountants think about structuring decisions beyond superannuation. Advisers Digest’s Director, Peter Johnson, explored when a company structure may be more effective, while RSM’s Partner, Katie Timms compared SMSFs and trusts across tax, control, compliance and lifecycle considerations in a changing legislative environment.
Overall, the conference reinforced that as Division 296 progresses, specialist SMSF expertise will be essential to successfully navigate the reform and it’s complexities.