With Div 296 now commencing from 1 July 2026 many advisers and trustees are asking us: ‘Do I need to update my deed?’.
As usual, the answer is not straightforward.
What is Div 296?
Generally speaking, tax outcomes for an SMSF are driven by the relevant legislation and regulations, with the deed having a more limited role (except in unusual or exceptional circumstances).That is, the SMSF deed is unlikely to alter tax outcomes for a fund.
The new Div 296 tax is a tax levied on a member of a superannuation fund (where they meet the relevant super balance thresholds) and not on the fund/trustee itself. However, a member can pay this tax from their superannuation balance.
Release of super
Div 296 allows for the release of super money, via a release authority, to pay Div 296 tax (which is a personal tax on the member) even where a condition of release is not otherwise met. If such a release is to be relied on to pay Div 296 tax, we consider the SMSF deed should expressly accommodate this release mechanism.
The DBA deed has included a general power for the trustee to comply with a release authority for many years (eg, ‘when authorised by a release authority or such other method allowed under the Standards’). Further, our SMSF deed has expressly referred to release authorities for taxes levied under Div 296 since 1 July 2024 (shortly after Div 296 was first proposed). Thus, where this type of release may be relevant, we would recommend a deed update unless the fund is already on a DBA deed from at least 1 July 2024.
Pension strategies
SMSF strategies around pensions are likely to be an important aspect of managing potential Div 296 tax outcomes. In particular, we consider it will be important to have the flexibility to easily make existing pensions reversionary or non-reversionary mid-stream. This is not a common mechanism in many deeds. The DBA deed has included this express power for a number of years and these provisions were further refined on 1 July 2025. Thus, for funds with members that are already in receipt of pensions (or intending to commence pensions in the near future), we would generally recommend an update for this point unless the deed is a relatively recent DBA deed, eg, within the last 3 years.
One further advantage of our SMSF deed update is that the binding death benefit nomination (BDBN) template form now allows for the BDBN to override pension documents to make pensions reversionary or non-reversionary. As a general statement, there can be reasons under Div 296 to make pensions non-reversionary.
Conclusion
Major changes such as the Div 296 tax regime can serve as a useful prompt to update a deed where it is older than 3-5 years to ensure the fund remains aligned with current law and can accommodate modern strategies.
The latest DBA SMSF deed will be available from around 1 July 2026 and this will likely contain several more express references to Div 296. Note that while the legislation is final, we are still monitoring developments as the regulations which contain considerable detailed provisions have yet to be finalised. Thus, there is still a lot of analysis to occur.
Some other related articles:
- Division 296: revised $3m+ super tax
- A handy tool to explain Division 296 tax to clients
- Revised Division 296 super tax from 1 July 2026
- Pre-30 June 2026 tips to plan for new Div 296 ($3M+) tax (webinar)
* * *
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional. The above does not constitute financial product advice. Financial product advice can only be obtained from a licenced financial adviser under the Corporations Act 2001 (Cth).
Note: DBA Lawyers hold SMSF CPD training throughout the year. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.
For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.
DBA LAWYERS
15 April 2026
