“We’ve moved from a 15 per cent environment to 30 per cent, then 40 per cent, and this could be the start of something much larger.”

Abbott said that while on the surface the new tax looks like a “fairness” measure, if you “dig deeper, the complexity (and danger) becomes clear”.

“The ATO will need data from every superannuation account an individual holds to correctly calculate this new tax,” he said.

He added that the new tax may get “tricky” if one fund makes a loss while another shows a gain, and also questioned how capital gains will be tracked across multiple funds.

“What happens when timing issues – like estate settlements – come into play?” he said.

“The administrative burden alone could be enormous, and the margin for error, even greater.”

Abbott said one of the biggest concerns he has with the Div 296 tax legislation is still the process that happens when someone passes away.

“If a member dies, and it takes a year or two to finalise the estate or sell assets, the capital gains realised during that period could artificially push the account balance over the tax thresholds,” he said.

“That means 40 per cent tax on the earnings above $10 million, plus an additional 17 per cent death benefits tax if benefits go to adult children. Add those together, and you’re suddenly looking at an effective 57 per cent ‘death tax’.”

Abbott said advisers and trustees should stay informed as the legislation is still being developed. He added they should also use predictive modelling to understand how estate events or market changes could push clients into higher brackets.

“Also review fund structures, reversionary pensions, and estate planning to minimise exposure, and educate your clients. It might take years for Div 296 to fully roll out, but the direction is clear. We need to plan, adapt, and stay one step ahead.”