Meg's Musings – April 2026

April has a familiar feeling every year don’t you think? There is the traditional “high” of a lot of public holidays (can you tell I’m writing this immediately after Easter?). But for SMSF accountants and advisers, there’s also a looming deadline (15 May) and it’s when speculation about the May Federal Budget starts in earnest. 

I am very grateful I didn’t waste too much of my life musing about the budget until very recently as I suspect the Government had imagined things quite differently even a few weeks ago. If I’d had to guess back in February, I would have said tax reform was highly likely. While that may not have touched super too much as the Government would feel it’s already achieved great things on that front (legislating Division 296 tax at last), I had expected other changes to raise taxes in some form or another.

But now, with the cost of living rising (fuel prices leading the way), a worrying war or two, inflation creeping higher .. it’s difficult to see the Government having space for a significant agenda. Certainly, I suspect their ambitions will now be a little less than the Treasurer would like to unveil before the next election gets too close. I wonder where that will leave us?

There is still plenty to occupy us at Heffron in the meantime.

The draft regulations for Division 296 tax have thrown a few curly (crazy?) ideas into the mix. There are none more interesting than the way in which the Government would like to capture the last skerrick of tax from high balance members who die. Essentially it could be summarised like this : Division 296 will chase deceased members (sending ever increasing tax bills to their estate) until their super is completely paid out. This will happen even if the super balance itself ends up being paid to a specific beneficiary – ie, the estate doesn’t even get the money.

Imagine this scenario : the deceased and second spouse were the sole members of the fund and directors of the corporate trustee. The structure made perfect sense because all the super was intended to be paid to the spouse – with other (non super) assets going to the kids (from the previous marriage) via the estate. But the new spouse understands Division 296 tax. They know that if they take their sweet time paying the death benefit, the children (who they never really liked anyway) will get a bigger and bigger Division 296 tax bill – to be paid from estate assets.

Sounds like a design that will be loved by the lawyers.

Stay informed on the new $3m tax legislation:
Division 296 – News and Resources