The start of a new financial year always brings changes to tax, superannuation, wages, business deductions and retirement planning thresholds. While some of the 1 July changes will provide modest relief for everyday workers, the more meaningful planning opportunities sit beneath the headline numbers.

For high-net-worth individuals, SMSF members, retirees, family groups and business owners, the 2026–27 financial year introduces several changes that should be reviewed carefully. These include higher super contribution caps, a higher transfer balance cap, the commencement of Division 296 tax for large super balances, the start of payday super, permanent changes to the small business instant asset write-off and the return of company loss carry-back rules.

For many clients, these changes are not just administrative updates. They may influence contribution timing, pension commencement strategies, business cash flow, succession planning, SMSF liquidity, investment structures and the broader question of how wealth should be held between superannuation, companies, trusts and personal ownership.

Below are the key changes and the planning implications.

Tax cuts: useful, but not the main planning event for high-income clients

From 1 July 2026, the tax rate applying to income between $18,201 and $45,000 reduces from 16% to 15%. For anyone earning more than $45,000, this provides a tax saving of $268 for the 2026–27 financial year. A further reduction is scheduled from 1 July 2027, when the rate is expected to fall to 14%, increasing the benefit to $536 per year.

For higher-income clients, this tax cut is welcome but relatively minor. It will not materially change the after-tax cash flow position for executives, professionals, business owners or retirees with significant taxable income. However, it is still worth considering how the additional cash flow is used.

For accumulators, the saving could be redirected toward debt reduction, personal insurance premiums, investment contributions or additional super contributions. For retirees, it may slightly reduce the amount that needs to be drawn from investment portfolios or pension accounts. For business owners, the personal tax cut should be viewed alongside larger changes affecting payroll, superannuation and company cash flow.

The key message is that the tax cut is helpful, but it should not distract from the larger planning areas that are likely to have a much greater impact.

Super contribution caps increase: a meaningful opportunity for wealth accumulation

One of the more important changes from 1 July is the increase in superannuation contribution caps.

The concessional contribution cap increases from $30,000 to $32,500. These are pre-tax contributions and include employer super guarantee contributions, salary sacrifice and personal deductible contributions. The non-concessional contribution cap also increases from $120,000 to $130,000, while the three-year bring-forward amount rises from $360,000 to $390,000.

This is particularly relevant for high-income earners, business owners and clients approaching retirement.

For high-income earners, the higher concessional cap increases the amount that can be contributed to super at concessional tax rates. However, employer super contributions count toward the cap, so employees with higher salaries may have less available room than they expect. Those earning above the Division 293 threshold should also remember that additional contributions tax may apply, reducing but not necessarily eliminating the benefit of concessional contributions.

For business owners, the increased cap may create more flexibility to extract business profits tax-effectively. Personal deductible contributions can be particularly useful where income is lumpy, such as after a strong business year, a bonus, asset sale, partnership distribution or taxable trust distribution. However, contributions need to be planned carefully around cash flow, total super balance, tax deductibility and timing.

For clients nearing retirement, the higher non-concessional cap and bring-forward amount may be even more powerful. The ability to contribute up to $390,000 under the bring-forward rule can be valuable where clients have surplus cash, have sold a business asset, received an inheritance, downsized investments, or are looking to move more wealth into the superannuation environment before retirement.

However, the opportunity is not universal. Eligibility depends on age, total super balance and previous contribution history. Clients with large balances should not assume they can automatically make further non-concessional contributions. This is where detailed contribution modelling is important.

Planning considerations include:

• Whether unused concessional cap amounts can be used under the carry-forward rules.
• Whether employer contributions will use most or all of the concessional cap.
• Whether a personal deductible contribution could reduce taxable income.
• Whether spouse contribution strategies could improve long-term balance equalisation.
• Whether non-concessional contributions should be made before or after a major liquidity event.
• Whether a bring-forward contribution should be triggered now or preserved for a later year.
• Whether super remains the best structure given Division 296 tax for very large balances.

For many high-net-worth clients, the contribution cap increases reinforce the value of annual planning. Missing a contribution year can be costly, particularly where a client has limited time before retirement.

Transfer balance cap rises to $2.1 million

The general transfer balance cap increases from $2 million to $2.1 million from 1 July 2026. This cap limits the amount that can be transferred into a tax-free retirement phase pension.

This change is particularly relevant for clients who are about to commence their first retirement phase income stream. If a client has not previously started a retirement phase pension, they may be able to transfer up to $2.1 million into the tax-free pension phase from 1 July 2026.

For clients who have already started a retirement phase pension, the position is more complex. Their personal transfer balance cap may sit somewhere between earlier cap levels and the new general cap, depending on when they started their pension and how much of their cap they have previously used.

This creates several planning considerations.

First, clients approaching retirement may need to consider the timing of their pension commencement. Starting a pension before or after indexation can affect how much can be moved into the tax-free retirement phase.

Second, couples should review whether their super balances are appropriately split. Where one spouse has a much larger super balance than the other, there may be long-term tax and estate planning benefits in equalising balances where possible. This can be particularly important where one member is close to the transfer balance cap and the other has unused cap space.

Third, clients with large accumulation balances need to understand that amounts above the transfer balance cap generally remain in accumulation phase, where earnings are still taxed. The increase to $2.1 million is helpful, but it does not remove the need to plan for balances that exceed the retirement phase cap.

For SMSF clients, this may also affect investment strategy. Pension phase assets may receive more favourable tax treatment than accumulation phase assets, so asset allocation between pension and accumulation accounts should be reviewed carefully.

Division 296 tax: the major issue for large super balances

The most important change for high-net-worth superannuation members is the commencement of Division 296 tax from 1 July 2026.

Division 296 reduces the tax concessions available to individuals with total super balances above $3 million. For clients with very large super balances, the additional tax may be significant, especially where balances exceed $10 million.

This is a major planning issue for SMSF members, business owners who hold business property inside super, wealthy retirees, and family groups that have accumulated large balances over time.

The key planning question is no longer simply, “How much can we get into super?” It is now, “How much should remain in super, and what assets are best held there?”

Superannuation remains a highly effective structure for many clients. Even with Division 296, it may still provide concessional tax treatment compared with personal marginal tax rates. However, the relative advantage may narrow for very large balances. This means clients should review whether future savings should continue to be directed into super or whether alternative structures such as companies, trusts, insurance bonds or personal investment portfolios may be more appropriate.

Liquidity is another important issue. Some SMSFs hold illiquid assets such as property, farms, business premises or private investments. If additional tax liabilities arise, the fund or member may need sufficient liquidity to meet those obligations without being forced to sell assets at an unfavourable time. This is particularly important for SMSFs with large single-asset exposures.

Estate planning also becomes more important. Large super balances already require careful death benefit planning, particularly in blended families or where benefits may be paid to adult children. Division 296 adds another layer of complexity. Binding death benefit nominations, reversionary pensions, liquidity planning and equalisation between beneficiaries should all be reviewed.

For clients affected by Division 296, the review should include:

• Current and projected total super balance.
• Whether the client is likely to exceed $3 million or $10 million.
• Asset mix inside super.
• Realised income and capital gains expected inside the fund.
• Liquidity available to meet tax liabilities.
• Whether future contributions remain appropriate.
• Whether pension commencement or withdrawals should be considered.
• Estate planning and beneficiary outcomes.
• Whether investment ownership should be diversified outside super.

This does not mean large super balances should automatically be reduced. It does mean that superannuation should now be reviewed as part of a broader wealth structure rather than in isolation.

Payday super begins: a major operational change for employers

From 1 July 2026, employers are required to pay superannuation at the same time as wages, rather than relying on the previous quarterly payment cycle. Contributions are generally required to reach the employee’s super fund within seven business days of payday.

For employees, this is positive. Super contributions will reach accounts sooner, providing more time for investment earnings and reducing the risk of unpaid super.

For business owners, the change is more significant. Payday super may materially affect cash flow, payroll systems and compliance processes.

Businesses that previously held superannuation contributions until the quarterly due date will no longer have that working capital buffer. This is particularly relevant for businesses with large payrolls, tight cash flow cycles, seasonal revenue, or uneven debtor collection.

Business owners should review:

• Payroll software readiness.
• Super clearing house processing times.
• Cash flow forecasting.
• Employment contracts and payroll calendars.
• Salary sacrifice arrangements.
• Contribution cap monitoring for senior employees.
• Internal controls to ensure payments are made on time.

This change also increases the importance of payroll accuracy. Late or incorrect super payments can create penalties and administrative issues. Business owners should ensure their payroll team, bookkeeper or external accountant is ready for the new regime.

For high-income employees who salary sacrifice, payday super also means contributions may arrive more frequently. This is useful, but it also requires better cap monitoring during the year. Clients should avoid accidentally exceeding concessional caps because employer and salary sacrifice contributions are now being processed more regularly.

Minimum wage increase: payroll and margin pressure for business owners

The national minimum wage increases to $26.44 per hour, or $1,004.90 per week, from the first full pay period starting on or after 1 July 2026. Minimum award wages also increase by 4.75%.

For many high-net-worth clients, this change may not affect their personal income. However, it may affect businesses they own or invest in.

Labour-intensive businesses will need to assess the impact on margins. This is particularly relevant for hospitality, retail, healthcare, childcare, manufacturing, agriculture, logistics and service-based businesses.

The wage increase should be considered alongside payday super, payroll tax, workers compensation premiums, leave provisions and broader employment costs. A wage increase may appear manageable in isolation, but when combined with superannuation, payroll taxes and other employment obligations, the true cost can be materially higher.

Business owners should review pricing, staffing levels, rostering, productivity, automation and cash flow forecasts. Where margins are already tight, early planning is essential.

Medicare levy surcharge thresholds increase

The Medicare levy surcharge income thresholds increase from 1 July 2026, allowing single individuals to earn up to $105,000 before the surcharge applies if they do not hold appropriate private hospital cover.

For high-net-worth clients, the practical impact may be limited, as most will sit well above the threshold or already maintain private health insurance. However, it remains relevant for adult children, younger professionals, separated spouses, retirees with fluctuating income, and family members who may be close to the threshold.

This is also a reminder that private health insurance should not be assessed only from a tax perspective. The decision should take into account health needs, hospital access, family circumstances, age, cash flow and the Medicare levy surcharge position.

$1,000 standard work-related deduction: useful simplification, but not always optimal

A new standard deduction of up to $1,000 for work-related expenses applies from the 2026–27 year. This allows eligible taxpayers to claim a simplified deduction instead of keeping receipts for actual work-related expenses.

This may be useful for employees with modest work-related costs. However, many professionals, executives and business owners already incur deductible costs above $1,000. For those clients, the existing method of keeping records and claiming actual deductions may still produce a better outcome.

This is especially relevant for professionals who incur costs for registrations, continuing professional education, travel, home office use, technology, subscriptions, tools, uniforms or professional memberships.

The planning point is simple: do not automatically take the shortcut if your real deductions are higher. Good record keeping remains valuable.

Paid parental leave increases

Government paid parental leave increases to 130 days, or 26 weeks, for children born or adopted from 1 July 2026. The number of reserved days for a partner also increases to 20 days.

This change may be more relevant for younger professional families, business owners planning for succession or maternity/paternity leave, and employers managing leave obligations.

For employees, it may improve household cash flow during the early stages of raising a child. For business owners, it is another reminder to plan workforce coverage, payroll administration and leave policies carefully.

High-income families should remember that parental leave planning is not only about government payments. It should also include cash reserves, insurance cover, childcare costs, mortgage commitments, investment contributions and career flexibility.

Small business instant asset write-off becomes permanent

The $20,000 instant asset write-off becomes permanent from 1 July 2026 for eligible small businesses with turnover of less than $10 million. Eligible assets costing less than $20,000 can be immediately deducted, provided they are first used or installed ready for use in the relevant financial year.

This is a valuable cash flow measure for small business owners. It allows businesses to bring forward deductions for eligible assets rather than depreciating them over several years.

However, the write-off should not drive poor spending decisions. A deduction is not a rebate. Spending $20,000 to reduce tax is only sensible if the asset is genuinely required and will improve business productivity, revenue, efficiency or risk management.

Business owners should consider whether eligible purchases can support growth, such as technology upgrades, equipment, fit-out items, tools, security systems or operational improvements.

The key planning points are:

• The threshold applies per asset.
• The asset must be used or installed ready for use in the relevant year.
• Only the business-use portion is deductible.
• Cash flow should still be preserved.
• The purchase should make commercial sense before tax.

For business owners, the permanent nature of the measure is useful because it allows better forward planning rather than rushing purchases at year-end.

Loss carry-back returns for companies

From 2026–27, eligible companies can use a current-year tax loss to obtain a refund for tax paid in the prior two income years. This applies to companies with turnover of up to $1 billion, although it will be particularly relevant for small and medium businesses.

This is a meaningful cash flow tool for business owners.

The ability to carry back losses is useful where a company has been profitable in prior years, paid tax, and then experiences a temporary loss due to expansion, investment, economic conditions or restructuring. Rather than waiting to use losses against future profits, the company may be able to access a refund sooner.

This can support businesses that are investing through a temporary downturn, funding expansion, managing working capital pressure, or dealing with cyclical trading conditions.

For business owners, this creates planning opportunities around:

• Timing of deductible expenditure.
• Asset purchases.
• Expansion projects.
• Tax instalments.
• Company cash flow.
• Dividend policy.
• Working capital needs.
• Group structure and company profitability.

However, the rules need to be applied carefully. Companies should work closely with their accountant to confirm eligibility, franking account implications, continuity requirements and the amount of prior-year tax available to be refunded.

Why these changes matter most for high-net-worth clients

For most Australians, the headline benefit of the new financial year is a modest tax cut. For high-net-worth individuals and business owners, the more important issue is structural planning.

The 2026–27 year reinforces several key themes.

First, superannuation remains attractive, but it is becoming more complex. Higher contribution caps and a higher transfer balance cap create opportunities, but Division 296 means very large balances need deeper review.

Second, business cash flow planning is becoming more important. Payday super, wage increases, instant asset write-offs and loss carry-back rules all affect how cash moves through a business.

Third, tax planning should be integrated with investment planning. The question is not simply how to minimise tax this year, but how assets should be owned, how income should be distributed, how liquidity should be managed and how wealth should pass between generations.

Fourth, annual reviews are no longer enough for many clients. Contribution caps, pension rules, payroll obligations and business tax settings can all create opportunities or risks during the year.

Cadre Capital Partners’ view

The 1 July changes are a reminder that financial planning is most valuable when it is proactive.

For individuals, the focus should be on using the new super caps effectively, reviewing whether additional contributions are appropriate, and considering pension commencement strategies where retirement is approaching.

For retirees, the increase in the transfer balance cap should prompt a review of retirement phase pensions, accumulation balances, minimum pension drawings, investment allocation and estate planning.

For SMSF members with large balances, Division 296 should be reviewed carefully. The priority is not necessarily to withdraw money from super, but to understand the tax exposure, liquidity position and whether the fund’s investment strategy remains appropriate.

For business owners, the new financial year is a good time to review payroll systems, payday super compliance, wage increases, tax instalments, business asset purchases and whether loss carry-back rules could support cash flow.

For family groups, the broader question is how wealth should be structured across superannuation, companies, trusts, personal portfolios and property. The right answer will depend on tax, control, asset protection, succession planning, liquidity and long-term investment goals.

Key actions to consider

High-net-worth individuals and business owners should consider the following actions early in the financial year:

• Review concessional and non-concessional contribution capacity.
• Check whether carry-forward concessional contributions are available.
• Model whether the bring-forward rule should be triggered.
• Review total super balances against the $3 million and $10 million Division 296 thresholds.
• Review SMSF liquidity and asset allocation.
• Consider pension commencement timing and transfer balance cap usage.
• Equalise super balances between spouses where appropriate.
• Review estate planning documents and binding death benefit nominations.
• Confirm payroll systems are ready for payday super.
• Reforecast business cash flow after wage and super changes.
• Consider whether planned business asset purchases qualify for the instant asset write-off.
• Discuss loss carry-back eligibility with the business accountant.
• Review whether private health insurance remains appropriate for family members near Medicare levy surcharge thresholds.
• Maintain records where actual deductions are likely to exceed the $1,000 standard deduction.

Final thoughts

The 1 July changes are not just technical updates. They create real planning implications for clients with significant income, large super balances, business interests or complex family wealth structures.

For some, the opportunity will be to contribute more into super. For others, the priority will be managing large super balances more carefully. Business owners may need to focus on payroll compliance and cash flow, while retirees may benefit from the higher transfer balance cap.

The key is to avoid looking at each change in isolation. Tax, superannuation, investments, business cash flow and estate planning all interact. The best outcomes will come from reviewing the full picture and making decisions before deadlines force the issue.

As always, individual circumstances matter. Please call Cadre Capital Partners if you would like to discuss any of these matters.