Strategies to consider before 1 July

There are several strategies that SMSFs should put in place before 1 July in preparation for the introduction of Division 296 tax, a legal specialist said.

Bryce Figot, special counsel for DBA Lawyers, said one of the first things to do before 1 July 2026, when Div 296 begins, is “nothing”.

“I don’t think anyone is going to need to majorly restructure. In other words, don’t just do something. Stand there. I know under the previous iteration, people were really talking about what they needed to do to prepare for the introduction of this tax but that’s under the previous iteration,” he said.

“I think really for this iteration, it’s far more gentle even though there are some headline tax changes, particularly for those above $10 million. However, I suspect it will be very unlikely that you’d need to do any major restructuring.”

He continued, however, there are strategies that might involve proactive actions including ensuring equal balances.

“For example, between a husband and wife, try to ensure that they have equal balances even if, currently, they are both well below $3 million and even though that $3 million threshold will be indexed,” he said.

“Even for a relatively young couple with a relatively modest balance, try to ensure that they have equal balances. That’s a good strategic tip for the Div 296 as well as for lots of other reasons including the transfer balance cap regime.”

Figot said before 1 July 2026 trustees should examine assets with unrealised capital losses but be very careful not to engage in a “wash sale”.

“I do wonder if people will wish to examine assets with unrealised capital losses, and you might wish to cherry pick the selling of certain assets,” he said.

Another strategy concerns automatically reversionary pensions which he said are “less attractive”.

“Consider changing to non-reversionary,” he added.

He continued that strategy number five is about market valuations, and he noted the lower market valuations are the better.

“They probably result in a lower tax liability. Under the previous iteration [of the Div 296 tax], people were saying they wanted to have a high-market valuation before the Div 296 starts,” he said.

“Under this regime, however, lower market valuations are better.”

Figot said from 1 July if a client does receive a Div 296 liability they should pay it from a super interest with a high taxable component.

“Strategy seven, you might want to think about adding new members,” he said.

“And finally, strategy eight, if an SMSF owns units in a unit trust, if the unit trust is going to sell the underlying real estate in that same financial year, try to dispose of the units or wind up the unit trust.”

Keeli Cambourne

February 16 2026

smsfadviser.com