This article explains how Simple Fund 360 will handle the Division 296 (Div 296) cost base adjustment, what your options are for single line wrap and managed investments, and what to gather now to be Division 296 ready.
For the features available today and the expected release timing, see Division 296 – What is currently available in Simple Fund 360 and what is coming.
Note
The Division 296 cost base adjustment is not the same as the 2017 transitional CGT relief (also called a cost base reset in Simple Fund 360). If you're looking for the 2017 CGT relief, see CGT Relief (Cost Base Reset).
Overview
Division 296 is an extra tax, in effect from 1 July 2026, on some of the super earnings of members whose Total Super Balance (TSB) is over $3 million, with a further 10% on the part above $10 million. The tax is assessed to the member, not the fund.
A fund can choose to adjust the cost base of its assets to their market value at 30 June 2026, for Division 296 purposes only. This means growth before 1 July 2026 isn't counted in the fund's Division 296 earnings. The ATO calls this the CGT adjustment election; it's also widely known as the cost base reset.
How Simple Fund 360 will handle the cost base adjustment
Division 296 Cost Base Reset (Cost Base Adjustment) Tool
The tool will support both directly held investments and wrap investments. It lists every asset the fund holds with its current cost base and unrealised gain or loss, and lets you reset these to the 30 June 2026 market value. Once the fund makes the election, a Div 296 Election report can be prepared for record keeping.
The tool supports a dual cost base system, so it separately displays the CGT and Div 296 cost bases:
| Cost base | Value | Used for |
|---|---|---|
| CGT cost base | The original cost base. It doesn't change. | The capital gain in the fund's taxable income, as now. |
| Div 296 cost base | The 30 June 2026 market value (if the fund makes the election). | Working out the fund's Division 296 earnings only. |
For any disposals after 30 June 2026, when you finalise the fund (create entries), Simple Fund 360 will separately calculate the CGT capital gain (using the original cost base) and the Div 296 gain (using the reset cost base). This helps you work out the additional Div 296 tax. We also plan to add a reconciliation section to make the two calculations easier to track.
Note
Calculating both gains doesn't mean the fund records extra income. The fund's own tax on the capital gain is unchanged. The Div 296 gain is only used to work out Division 296 earnings, which the ATO uses to assess the member.
Single line wrap and managed investments
If the fund holds a wrap or managed investment as a single line in Simple Fund 360, you have two options:
- Keep it as a single line and use the wrap worksheet in the Division 296 Cost Base Reset (Cost Base Adjustment) Tool (coming soon).
- Unwrap it and record each underlying investment individually. You can do this now.
Option 1: Keep it as a single line
The tool will include a worksheet to track the underlying investments held at 30 June 2026 within the wrap. The worksheet tracks the Div 296 cost base of these investments. You can continue managing the CGT cost base of the single line wrap by posting the required cost base adjustments in the Transaction screen.
Holdings at 30 June 2026
To ease the administrative burden, upload the Unrealised Capital Gains report as at 30 June 2026 from your wrap provider. We plan to use Smart Docs AI to split and record the investments in the worksheet. Tax Deferred, Tax Free and AMIT amounts will be extracted if they're included in the report.
Until then, you can enter the underlying investments in the worksheet manually.
Disposals after 30 June 2026
For any disposals after 30 June 2026, upload the Realised Capital Gains report. We plan to use Smart Docs AI to update the investments tracked in the worksheet, automatically reducing the units and cost.
Once all the investments listed in the worksheet have been fully disposed of, the worksheet is no longer needed.
Option 2: Unwrap it now
If you'd rather record each underlying investment individually, there are two ways to unwrap a single line investment:
- Smart Docs – CGT – Upload an Unrealised Capital Gains report from your wrap provider, review the data, and Smart Docs creates the investment transactions for you. The disposal of the 1-unit wrap at cost still needs to be recorded separately. See Smart Docs – CGT.
- BGL Excel (XML) Import – Use the wrap splitting template to enter each underlying parcel, including its contract date. See BGL Excel (XML) Import – Wrap Splitting.
Should I unwrap?
It depends on each fund's situation. The points below can help you decide.
| Consider unwrapping when | Consider keeping a single line when |
|---|---|
| The wrap platform has a data feed – A feed can bring in the underlying investment transactions for you. Check your platform's feed type in Summary of Supported Wraps & Investment Platforms. | The wrap needs a lot of manual processing – For example, there's no data feed available. |
| You want parcel-level tracking – You'd like to track each parcel's cost base and gain or loss individually from now on. | It's quicker to track Div 296 outcomes manually – For example, you already use an external worksheet or tool. |
| Reports – You're happy for the Balance Sheet (Statement of Financial Position) and Investment Reports to show the underlying investments instead of a single wrap account. | Reports – You'd like to keep reporting a single investment account in the Balance Sheet (Statement of Financial Position) and Investment Reports. |
What you need to gather now
Do you need to do anything?
If any member's TSB is approaching or has reached $3 million, it's advisable to run through the checklist below to be Division 296 ready.
- Total Super Balance of each member across all funds – Confirm the latest balances for every super interest each member holds outside the SMSF (for example, other SMSFs or APRA funds). Remember to exclude LRBA amounts.
- 30 June 2026 market values – A market value, with supporting evidence, for every fund asset, especially property and unlisted assets. SMSF auditors check that valuation evidence supports market value.
- Cost base and gain/loss reports – Purchase dates, cost bases and unrealised gain or loss schedules as at 30 June 2026, including the Unrealised Capital Gains report from wrap or managed investment platforms. Take note of Tax Deferred, Tax Free and AMIT amounts if they're not on the Unrealised Capital Gains report.
- Your election decision – Decide whether the fund will make the cost base adjustment election. The election covers all of the fund's assets, can't be revoked, and must be made by the due date of the fund's 2026–27 annual return.
To check your position, use the Div 296 Cost Base Analysis Report, the Division 296 Estimation AI Assistant (Beta) and the Insights Dashboard TSB filter.
Frequently Asked Questions
No. The adjustment only applies when working out the fund's Division 296 earnings. The original cost base is still used for the capital gain in the fund's tax return, so the fund keeps two cost bases for each asset it held at 30 June 2026.
No. The CGT relief cost base reset in Simple Fund 360 relates to the 2017 transitional CGT relief for the transfer balance cap and TRIS changes. The Division 296 cost base adjustment is separate and only applies for Division 296 purposes. See CGT Relief (Cost Base Reset).
No. You can keep them as a single line and use the wrap worksheet in the Division 296 Cost Base Reset (Cost Base Adjustment) Tool once it's released. See Should I unwrap? above to help you decide.
No. The election must be made in the approved form, but it doesn't need to be provided to the ATO. The fund must keep a record of the choice, including the cost base of each asset as affected by it. See ATO: About Division 296 tax for SMSFs.
This article is general information only and is not tax, legal or financial advice. Division 296 rules and ATO guidance are still being finalised, so check the ATO website or speak to your accountant or adviser. We'll keep this article updated as our Div 296 features are released.
Related articles
- Division 296 – What is currently available in Simple Fund 360 and what is coming
- Div 296 Cost Base Analysis Report
- Div 296 CGT Reset Letter, Minute and Resolution
- Division 296 Estimation AI Assistant (Beta)
- Smart Docs – CGT
- BGL Excel (XML) Import – Wrap Splitting
- How to split a Managed Investment/Wrap account into its individual assets?
- Summary of Supported Wraps & Investment Platforms
- ATO: About Division 296 tax for SMSFs