Key overviews
- The superannuation concessional contributions cap is $30,000 for 2025–26, rising to $32,500 from 1 July 2026, review your salary sacrifice and personal contributions before 30 June.
- Division 296 commences 1 July 2026, applying an additional 15% tax on proportionate earnings where super balances exceed $3 million - SMSF trustees should review pension structures and death benefit nominations.
- The Government proposes replacing the 50% CGT discount with an indexation + a minimum 30% tax method on capital gains from 1 July 2027. This means all CGT assets will need a market valuation as at 30 June 2027.
- Proposed changes to discretionary trust distributions from FY 2028–29 could eliminate refundable franking credits for beneficiaries with a marginal tax rate below 30%, hitting low-income families hardest.
- Australia's inflation sits at 4.6% and GDP growth is forecast to soften to 1.75% in 2026–27, now is the time to review your portfolio strategy with your Morgans adviser.
- None of the proposed tax changes referenced in this article are yet legislated, please do not restructure your financial situation without seeking professional advice first.
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Have you forgotten something? End of financial year Superannuation checklist
With 30 June fast approaching, now is the time to review your superannuation. Key actions include checking salary sacrifice and personal deductible contributions against the $30,000 (25/26fy) concessional cap, considering catch-up contributions from unused caps over the past five years, and ensuring non-concessional contributions stay within the $120,000 (25/26fy) limit. Account-based pension holders must confirm minimum drawdown payments have been made to avoid the pension being deemed to have ceased. The concessional cap rises to $32,500 and the non-concessional cap rises to $130,000 from 1 July 2026.
Don't leave it to the last minute, speak to your Morgans adviser now to finalise your end-of-financial-year superannuation and pension strategies before 30 June.
What the Capital Gains Tax (CGT) changes really mean for investors
From 1 July 2027, the Government proposes replacing the 50% CGT discount with cost base indexation and a minimum 30% tax on capital gains for individuals, partnerships and trusts. Existing assets will be partially grandfathered, but all CGT assets will require a market valuation as at 30 June 2027 to manage the new CGT regime post-1 July 2027.
Our analysis shows the reforms disproportionately affect lower-income earners, those on a 16% marginal rate could pay over $10,000 more, while higher-income taxpayers see only modest savings. Post-2027 assets face dramatically higher effective tax rates across all brackets.
Contact your Morgans adviser to discuss how the proposed CGT changes may affect your portfolio. These changes are not yet legislated, do not act without professional advice.
Economic update: Chalmers' big show! grand presentation conceals major flaws
Morgans Chief Economist Michael Knox argues the 2026 Federal Budget masks structural weaknesses behind optimistic messaging. Australia's inflation sits at 4.6%, well above global peers, while the budget projects a continuing structural deficit of ~1% of GDP, with debt rising to 35.8% of GDP by 2028–29. Increased taxes on savings via CGT reform, family trusts and negative gearing restrictions risk reducing private investment, productivity and living standards. GDP growth is forecast to soften to 1.75% in 2026–27, with unemployment edging up to 4.45%.
Stay informed on how evolving economic policy may affect your investment strategy, reach out to your Morgans adviser for a portfolio review tailored to the current outlook.
Technically speaking: refundable franking credits: an at-risk species
The Government's proposed 30% minimum tax on discretionary trust distributions (from FY 2028–29) would fundamentally change how franking credits flow to beneficiaries. Under the new rules, franking credits will be absorbed at the trust level first, effectively destroying refundability for any beneficiary with a marginal tax rate below 30%. Modelling across low, medium and high-income family scenarios shows total gross tax is higher under the proposed rules in every case. Low-income families are worst affected, losing valuable cash refunds entirely.
If your family uses a discretionary trust to distribute franked dividends, speak to your Morgans adviser and accountant to understand the potential impact. The changes are not yet law so do not act without professional advice.
SMSF trustee education: Division 296: estate planning implications for SMSFs
Division 296 (Div296) commences 1 July 2026 and applies an additional tax on superannuation balances above $3 million. For SMSF members, the choice between reversionary and non-reversionary pensions becomes debatable. A reversionary pension can immediately push a surviving spouse's Total Super Balance above the $3 million threshold, triggering a Div296 liability. A non-reversionary pension with a valid Binding Death Benefit Nomination may allow the surviving spouse to defer receipt, if possible, and avoid the Div296 liability for that financial year. We recommend SMSF Trustees review their estate planning nominations and SMSF trust deed as a result of the new legislation commencing this 1 July 2026.
Review your SMSF estate plan, pension structure and death benefit nominations to ensure they are aligned with the new Div296 rules.
Contact us
With tax rules changing, economic headwinds building, and key super deadlines approaching fast, now is the time to act.
If you would like to discuss any of the topics covered in this article with a qualified financial adviser, we are here to help. Contact us today to get started.
FAQs
What is the superannuation concessional contributions cap for 2025–26?
The concessional contributions cap for the 2025–26 financial year is $30,000, covering salary sacrifice and employer super guarantee payments. From 1 July 2026, the cap rises to $32,500. Speak to your Morgans adviser before 30 June to make sure you are maximising your contributions.
What is Division 296 tax and when does it start?
Division 296 is an additional 15% tax on superannuation earnings for members with a total super balance above $3 million. It commences on 1 July 2026 and has significant implications for SMSF estate planning, particularly around reversionary and non-reversionary pension structures.
What are the proposed capital gains tax changes in Australia from 2027?
From 1 July 2027, the Government proposes replacing the existing 50% CGT discount with cost base indexation and a minimum 30% tax on capital gains for individuals, partnerships, and trusts. All CGT assets will require a market valuation as at 30 June 2027. These changes are not yet legislated, do not act without professional advice.
Will the proposed tax changes affect franking credit refunds from family trusts?
Under the Government's proposed 30% minimum tax on discretionary trust distributions from FY 2028–29, franking credits would be absorbed at the trust level first, meaning beneficiaries with a marginal tax rate below 30% could lose their cash refunds entirely. Low-income family members are the worst affected. These changes are not yet law.
How could the 2026 Federal Budget affect my investment portfolio?
Proposed increases in taxes on savings through CGT reform, restrictions on negative gearing, and changes to family trust distributions could reduce private investment returns and affect long-term portfolio planning. Australia's inflation currently sits at 4.6% and GDP growth is forecast to soften to 1.75% in 2026–27. A portfolio review with your Morgans adviser is strongly recommended.
Disclaimer
The information contained in this document is provided as general advice only and is made without consideration of an individual's relevant personal circumstances. Please contact your Morgans adviser to discuss your individual circumstances. The proposed changes referenced above are not yet legislated. Source: Your Wealth, Issue 31, Second Half 2026.
