The government announcement indicating the Division 296 tax measure has been changed represents a huge policy backflip.

The SMSF sector by its nature is vulnerable to targeted criminal activity and the ATO is doing its best to assist trustees combat these bad actors.

Ensuring timely lodgement of the SMSF annual return and combating illegal early access of returns remain ATO priorities for 2025/26.

The proposed Division 296 tax measure has conflated questions about taxing super concessions and unrealised capital gains allowing the government to dodge reasonable criticisms of the new impost.

Flaws in the bill tabled to introduce the proposed 15 per cent tax for total super balances over $3 million continue to surface.

Division 296 tax becoming a reality has led to some SMSF trustees looking at practices which may have a negative impact on them and the sector.

The 3 May election has returned the Albanese government which will also result in the likely reappearance of the Division 296 tax on superannuation balances with its path through parliament now facing less hurdles.

The fate of the Division 296 tax is facing different challenges and scenarios in the face of the upcoming federal election.

A determination by AFCA may force SMSF trustees viewed by regulators as wholesale investors to exit assets purchased under that definition with questions being asked about how investors with significant assets should view themselves.