Better Targeted Super Concessions is law
Better Targeted Super Concessions is now law and takes effect from 1 July 2026.
The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 and the Superannuation (Building a Stronger and Fairer Super System) Imposition Act 2026 received royal assent on 13 March 2026 and are now law.
Draft regulations are open for consultation and may be viewed here
Key Takeaways
- Division 296 applies from 1 July 2026 (2026–27 financial year onwards)
- New tax applies to individuals with TSB above $3 million
- Additional tax applies for TSB above $10 million
- Thresholds will be indexed annually
- Changes to TSB definition and calculation
- LISTO threshold increases from 1 July 2027
Better Targeted Super Concessions (Division 296)
This means Better Targeted Super Concessions (Division 296), a key aspect of those acts, will apply from the 2026–27 financial year onwards.
From 1 July 2026, if an individual’s total super balance (TSB) at the end of the financial year exceeds the large super balance threshold (LSBT) (set at $3 million for the 2026–27 financial year), the individual will be subject to Division 296 tax of 15% on the proportion of earnings relating to the TSB that exceeds the LSBT.
Further, if an individual’s TSB at the end of the financial year exceeds the very large super balance threshold (VLSBT) (set at $10 million for the 2026–27 financial year), the individual will be subject to additional Division 296 tax of 10% on the proportion of earnings relating to the TSB that exceeds the VLSBT.
For subsequent years, in considering whether an individual has exceeded the LSBT or VLSBT for a financial year and is liable to Division 296 tax, the TSB used will be the greater of the TSB amounts either immediately before, or at the end of, that financial year.
These thresholds will be indexed incrementally to the consumer price index.
- The LSBT is indexed in $150,000 increments.
- The VLSBT is indexed in $500,000 increments.
If there are members whose Division 296 TSB exceeds the LSBT, trustees will need to report new information in the SMSF annual return for the 2026–27 financial year onwards.
Total Super Balance
The new law also changes the definition of TSB.
From 1 July 2026:
- An individual’s TSB will be calculated as the sum of the TSB values for each of their Australian superannuation interests. The TSB value will be determined using a method or value prescribed in the regulations.
- The TSB change ensures annual valuation requirements and removes the link to transfer balance account (TBA).
- Superannuation interests in foreign funds are excluded from an individual’s TSB.
ATO will shortly release detailed information at ato.gov.au on Better Targeted Super Concessions.
Low Income Superannuation Tax Offset (LISTO)
Also, as part of the new law, from 1 July 2027 the LISTO income threshold will increase from $37,000 to $45,000, matching the top of the second income tax bracket. The maximum payment will also increase to $810 to account for recent increases in the Superannuation Guarantee rate.
TBAR Lodgment Reminder for April 2026
If transfer balance account events occurred in the March quarter, a TBAR must be lodged by 28 April 2026.
Key Takeaways
- TBAR due date for March quarter: 28 April 2026
- Applies to all SMSFs, regardless of member balance
- Lodgment required only if TBA events occurred
- Earlier lodgment may be required if a member exceeds their transfer balance cap
- Online Services for Business is the preferred lodgment method
TBAR Lodgment Requirements
All self-managed super funds (SMSFs) must report transfer balance account (TBA) events on a quarterly basis by lodging a transfer balance account report (TBAR). These events must be reported irrespective of the member’s total superannuation balance.
TBARs for the March quarter are due on 28 April 2026.
If no TBA event has occurred during the quarter, then no lodgment is required.
An earlier TBAR lodgment may be required where a member has exceeded their personal transfer balance cap.
Additional Guidance
Refer to Event-based reporting for SMSFs and the TBAR instructions when preparing the TBAR.
The easiest way to lodge is through Online Services for Business.
Source: Australian Taxation Office
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