Accountants urge 2-year breather on Div296 penalties

Mike Taylor

Managing Editor and Publisher

13 April 2026

Major accounting group Charter Accountants Australia and New Zealand (CA-ANZ) is urging the Government to allow a two-year delay on imposing fines relating to mistakes around the implementation of the legislation underpinning Division 296.

In a submission responding to Treasury’s draft regulations attaching to the Building a Stronger and Fairer Super System Act (BTSC), the accounting group has pointed to a range of problems with the draft regulations into apparent conflicts of intent.

However, on the question of penalties for reporting errors on the part of superannuation entities, CA-ANZ said the finalised regulations should provide that such fines and penalties will not apply in the first two years of reporting BTSC data.

Further, it said that for the first three to five years a 50% discount should be applied to the normal penalties that can apply.

The submission also said that CA-ANZ is concerned about self-managed superannuation funds with assets segregated between members.

“We are concerned about a range of scenarios when such arrangements are in place (it cannot be assumed that such arrangements are exclusively used for tax planning purposes) including the following:

65. Under the proposed calculation methodology in Reg 296-65.03, it is possible that a small superannuation fund member may be allocated income and/or realised capital gains, and hence BTSC, in relation to specific assets even though the member may never have anything to do with those assets. This is iniquitous and the proposed regulation should be adjusted accordingly.
66. Stamp duty concessions – further to our point above in some cases small superannuation fund members have had to allocate assets to a specific member in order to access stamp duty concessions available on the transfer of commercial real estate.
67. Relationship breakdown splits and mid-year exits– after a relationship breakdown (for example, divorce) it is possible that for a period of time both parties remain a member of the same super fund; in time one party may decide to leave the super fund and move relevant assets to another superannuation fund; because of the formula in proposed Reg 296-65.03, the departed member may have income and/or realised capital gains earned after their departure included in their BTSC income. This should be corrected for any member that leaves a small super fund during a financial year.

The submission also echoed the concerns expressed by the SMSF Association, noting that “post-death attribution rules may impose significant burden on legal personal representatives”.

“Treasury should acknowledge this and confirm a pragmatic compliance approach,” it said.