The 2025 calendar year is fast coming to an end and what a year it’s been ramping up to what could be a crescendo in the last days of December. This a reference to the state of play with the proposed Division 296 tax, the additional impost on total super balances above $3 million, and it is amazing, and perhaps a tad disappointing, I am writing about this topic just as I did in the last editorial of 2024.
As I have alerted to you earlier, Division 296 2.0 dropped back in October and certainly had us all rejoicing at the fact the measure will no longer see a tax on unrealised capital gains. But that’s not to say the new impost calculation method will not come without its own issues – all of which we will not really have a better handle on until the government releases the associated draft legislation.
Albeit Treasurer Jim Chalmers has bought himself a little bit more time with the implementation date pushed back to 1 July 2026, the clock is still ticking to get this legislation through as quickly as possible. However, the draft bill must first be released and an industry consultation period still needs to run its course before any further definitive developments can happen.
Canberra has indicated the draft legislation will drop before Christmas Day and this is where some games can be played. Stakeholder feedback is critical to the process, but what will be worth keeping your eye on is how the timing of this whole process plays out. And this one could be a bit more complex as I’m sure the industry funds will be having their say in no uncertain terms as the revised measure has a significant impact for them.
But as I said, the clock is ticking so don’t be surprised if the draft legislation is announced just before the Christmas break and just as all organisations are closing for the festive season. Will this mean we will see a helter-skelter process kicked off in the last days of the year? Only time will tell.
When reflecting on the year gone by, one positive has been the revision to Law Companion Ruling 2021/2 that clarified certain situations regarding the non-arm’s-length expenditure (NALE) rules. If I was to identify one victory here, it would be the provision of greater clarity as to what SMSF trustees can and cannot charge for when performing services on behalf of a fund. With it we are finally approaching a situation where the NALE, and by extension the non-arm’s-length income, rules are at an acceptable point.
As usual there is still some work to be done on the inclusion of some rectification measures for a tainted asset, but we are definitely heading in the right direction.
And it wouldn’t be right not to recognise the evolution of cryptocurrency as a popular asset within SMSFs. To this end, we have seen a concerted effort from the digital asset world to take on the compliance and knowledge issues associated with crypto with the establishment of the SMSF Innovation Council with OKX Australia chief executive Kate Cooper as its chair. Watch out for more developments with this asset class in the immediate future.
As you can see, it’s been action aplenty in 2025 with much significant change. There is still a lot to play out and to that I say bring on 2026.