“But where a lot of the requirements sit are regulations by law that don't need to go through both houses of Parliament. So we have seen two pieces previously introduced as regulations or exposure drafts for consultation. One of those has become regulations, which were around the legacy pension amnesty for SMSFs.”

Dunn said this was a positive outcome as it enables people to unwind defined benefit pensions that will be subject to an actuarial calculation each and every year to determine that value.

“And this is where there's a lot of discussion about to whom this tax is going to apply. One of the things that we did see in March of 2024 was a set of regulations that were providing a framework to value these defined benefit interests,” Dunn said.

“That was an exposure draft and, again, we don't have any regulations released in respect to these, so ultimately what we're seeing at the moment is the Opposition saying it will not apply to the Prime Minister and to a number of other politicians. However, at this point in time, until we have a law with the Division 296 measures in their own right, we don't know how the government intends to apply [this regulation].”

He continued that from past experiences with the exposure draft of the legislation, there was the inclusion of those on constitutionally protected defined benefits, and the expectation is that if the government is to apply the Div 296 tax consistently, it will most probably do the same for the exposure draft concerning valuing defined benefit interests.

“However, it needs to rewrite the definition of total superannuation balance as part of these amending measures to ensure that it can help characterise defined benefit interests for the purposes of these Division 296 tax laws.”

“They're looking at ways that already exist within the superannuation laws that deal with this, such as those around family law. [In this instance], if someone has a defined benefit interest, and there is a marital breakdown, we need quantification of how much of that superannuation interest as we know it would be a divisible interest by how much that benefit is worth at a point in time.

“In essence, the government is looking at taking that sort of framework and being able to apply it to this situation to then be able to determine how the Division 296 tax liability would apply.”

From a technical perspective, Dunn said, there does need to be a change to some of the rules that exist for those in positions like the prime minister around the application of contributions.

“We don't have the full mechanism yet because it was an exposure draft that we'd seen previously, and until we've got more meat on the bone to work through, we're spitballing in terms of what we need to do [as advisers],” he said.

He added that with the plethora of information coming through all media channels, advisers must be able to “cut through fact and fiction” and know what clients need to understand to plan for the introduction of the tax.