20 qualified appointments in 60 days. Funnel already built below.

title: Heffron VSL, Division 296 and SMSF Administration (Trustees Direct)
length: ~10 minutes spoken
audience: Australian SMSF trustees, 55-75, with $1m+ super balances
hook: Division 296 (the new $3m super tax) and the quiet ATO scrutiny that comes with it

Hook
If you run your own SMSF and your balance is anywhere north of $1m, there's a piece of legislation that has spent the last six months rewriting the rules for people exactly like you. It's called Division 296. And by the time Parliament finishes with it (which the current sitting calendar puts somewhere between now and the back end of this year), it'll reshape how the ATO looks at your fund, how earnings are calculated, what happens when a member dies, and whether the children you'd quite like to leave something to actually receive it.

I'm Meg Heffron. I run Heffron, and we've been doing nothing but SMSFs since 1998. My team and I administer funds for trustees across every Australian state, we consult to Treasury and the ATO on this very legislation, and I write about Division 296 most months in the Australian Financial Review, The Australian, and Firstlinks. If you're a trustee with a meaningful balance and you've felt the ground shifting under your fund this past year, you're not imagining it. The ground is shifting. And in the next ten minutes I'd like to walk you through what we're actually seeing, what we're doing about it for our trustee clients, and how to decide whether your fund is in the right hands for what's coming.

Body

Let me start with the version of Division 296 that's now in front of Parliament. The original draft, the one most people heard about first, was the proposal to tax unrealised capital gains on super balances above $3m, and that bit has now been dropped. Good news (a bit). Less encouraging is the fact that the bill actually moving through Parliament has a few stings in the tail that have had very little public airtime, and they matter most for the people most likely to be watching this video.

Here are the mechanics, briefly. From 1 July 2025, if your total super balance crosses $3m at year-end, the proportion above $3m gets hit with an extra 15% tax on what the legislation calls your 'earnings' for the year. Sounds tidy. The catch is the way 'earnings' is defined. It looks at the movement in your total super balance across the year, with some adjustments for contributions and withdrawals, which means in any year your fund has a strong investment return, the calculation can produce a number that bears very little resemblance to what most people would call profit. If markets are flat or down for the year you can carry a loss forward, which helps. When markets run hard, though, you'll be writing a cheque.



The piece almost nobody is talking about is what happens when an SMSF member dies. The revised legislation tries to capture, in its own words, the last skerrick of tax from high-balance members in the year of their death. It does this through a calculation that runs all the way to the point benefits are paid out. So if a death benefit takes a while to administer (and many do, for very ordinary reasons), the Division 296 bill keeps growing in the background. The ATO has already signalled it'll be watching the requirement to pay benefits 'as soon as practicable' much more closely than it ever has. That phrase used to be a soft expectation. From mid-2026 it has a revenue impact attached to it, and revenue impact is what changes ATO behaviour.

If you're sitting on a balance over $3m, or a fund where two members combined are above $6m, or even just a fund that might tip over in the next few years with normal growth, this is the period where decisions get made. Strategic ones. The timing of your drawdowns. Whether to start a pension, or whether the spouse with the smaller balance should be receiving contributions instead, and whether your binding death benefit nomination needs to be redrafted to reflect what Division 296 now does to estate planning. None of these decisions are dramatic on their own. They become expensive when they're missed or done late.



Now for the part most administrators won't tell you. Most SMSFs in this country are administered by people who are doing their best on software that was designed for a simpler version of the rules. The legislation has outrun the tooling. We're seeing funds where the trustees have done absolutely nothing wrong and the administrator simply hasn't flagged a Division 296 exposure because the system isn't asking the question yet. There are also plenty of funds where the original accountant has retired or stepped back from SMSF work entirely, and the trustees have been shuffled without much fanfare to a generalist team who handles their compliance the way an outer-suburbs panel beater would handle a Ferrari. Sounds like a design that will be loved by the lawyers (eventually).

So, a quick word on our team and why we might be the right home for your fund.



Heffron has been operating exclusively in SMSFs since 1998. Twenty-seven years, only ever this. We've been named SMSF Adviser 'Administrator of the Year' five years running, and we've taken out the Core Data and SelfManagedSuper SMSF Administrator Award five times as well. Our team educates the rest of the industry, which is to say other administrators, accountants and advisers buy our courses to learn how to handle the law I'm describing to you right now. We sit on the panels where the ATO and Treasury work through how new legislation will actually be applied. That's why when something like Division 296 lands, we're not reading about it for the first time the same week you are.

Working with us actually looks like this. You get a named relationship manager. A real person at our team in Maitland or Brisbane whose direct line you have, whose email you have, and who knows your fund the way your GP knows your blood pressure. They handle accounting, tax, compliance, audit coordination, and the annual minutes, and they keep an eye on the things that change year to year (contribution caps, pension minimums, indexation thresholds, and now Division 296). If you have a question, you ring them. You don't go through a portal queue and you don't get bounced to whoever's free that afternoon.

Our administration sits in three tiers depending on the complexity of the fund. The Streamlined service runs at $3,170 a year including GST and covers funds with cash, listed shares, and the more straightforward wrap accounts. From there it steps up to the Standard service at $3,745 a year, which covers about 80% of the funds we look after, including property and crypto and the institutional accounts that need a bit more handling. At the top end is the Advanced service at $4,320 a year, which covers funds with collectables, foreign assets, private trusts, or multiple investment properties. Audit is included in all three. The fee is fixed. You get one invoice a year, you know the number in advance, and there are no surprises in May when everyone else is doing the inevitable mad rush around year-end.

If your accountant currently looks after your fund, we work alongside accountants all the time. Often the accountant is delighted to hand the SMSF administration over to a specialist team and keep the advice relationship intact. We've moved hundreds of funds across from other providers and the transition is something we organise, not something you have to project-manage. Mid-year switches are routine for us.

Body, objections
A few things people tend to ask at this point.

The first is whether the fee is steep. Compared to a discount provider it's higher. Set it against what one bad Division 296 decision can cost a fund with a $3m or $4m balance and it looks roughly like the cost of a sensible insurance premium. The trustees who choose us are the ones who've worked out that the cheap option isn't cheap once the ATO starts paying attention, which it's about to.

A second question is whether you really need an administration firm at all if your accountant has been handling things informally. You might not, if your accountant is one of the very small number who specialise in SMSFs full-time and keeps current on legislation like the bill in front of Parliament right now. If they don't, the risk you're carrying is quiet but real, and it tends to surface at the worst possible moment.

The third is the worry about switching. Trustees ring us anxious that moving providers will be a nightmare. It isn't. Our team has a checklist that runs the changeover. You sign two forms and we do the rest.

The fourth is the question of whether the firm is too big or too small. We sit deliberately in the middle. The technical team includes qualified actuaries and SMSF specialists who consult to the regulators, and at the same time you'll always know the name of the person looking after your fund. With offices in Maitland and Brisbane and clients in every state, almost all of our work runs over the phone, by email, and in scheduled video calls.

Body, who it's for


This is going to be a fit if you have a balance somewhere north of $1m, you take your fund seriously, you want a named person on the other end of the line, and you'd rather pay a sensible fixed fee for proper specialist work than the lowest possible figure for a service that treats your fund like a row in a spreadsheet. We work especially well with trustees who are in pension phase or about to enter it, trustees whose balance is heading toward the three million threshold, and trustees who have inherited an SMSF after a spouse has passed away and want a steady pair of hands while they take stock.

It's not going to be a fit if your fund is very small and very simple and the cost of professional administration would be disproportionate. eSuperfund or a software-only setup will probably serve you better, and we'll say so on the call rather than pretend otherwise.

CTA


If any of what I've just walked through is sitting in the back of your mind already, the next step is a complimentary phone or video consultation with our team. You bring whatever information you have on your fund (or don't; we'll work from a clean slate if that's easier) and we'll talk through your specific situation, where Division 296 might land for you, and whether moving across to us makes sense. If it isn't a fit we'll tell you so, and if there's something you can do yourself today that doesn't require us at all, we'll tell you that too.

Click the button beneath this video to book your complimentary consultation. You'll see a calendar with available times, you can choose phone or video, and you'll be speaking with someone on our team who knows SMSFs cold.

Division 296 is moving. Parliament returns to it this sitting, the ATO is already adjusting how it scrutinises high-balance funds, and trustees who get organised this year will have considerably more room to manoeuvre than trustees who wait. Click the button beneath this video, pick a time that suits, and we'll have a proper conversation about your fund.

Twenty-seven years of doing nothing but this. We'd be very glad to look at yours.