11 February 2026
Australia is already having an inheritance tax debate, just not out loud.
Alvia CIO Josh Derrington recently shared his perspective with The Australian Financial Review, observing that the proposed changes to Division 296 can feel like “a stealthy inheritance tax” once capital gains, death benefits and balance thresholds interact.
While public discussion has centred on headline rates and the $3 million threshold, the more consequential shift may lie in how the rules operate at the point of transfer. When a surviving spouse inherits and balances consolidate above the threshold, the combined effect of internal capital gains tax, Division 296 and existing super death benefit rules can materially reduce the after tax value passed to the next generation.
In practical terms, the policy changes blur the line between retirement savings and intergenerational capital. Superannuation has long been viewed as a tax effective retirement structure. Division 296 introduces a new layer of complexity that changes the strategic considerations for families with significant balances.
The headline may be about super. The signal is about wealth transfer.