The ATO has confirmed there will be changes the SMSF annual return (SAR) from the 2026/24 financial year to allow member earnings to be reported for Division 296 tax purposes.
However, the regulator has stipulated using this new field on the return will not automatically mean a particular member is in scope for the new impost.
“There will be changes to the 2027 SAR so SMSFs can report the Div 296 information to the ATO. But although that amount is reported in the SAR, the ATO will work out, a bit like Division 293, what the Division 296 tax liability will be for the member because there are some members who are also going to be members of APRA (Australian Prudential Regulation Authority)-regulated funds, so we will be looking at taking into account the Div 296 information reported from those funds as well as from the SAR,” ATO SMSF auditors director Kellie Grant told delegates at the Auditors Institute Auditors Day 2026 recently held in Sydney.
Further, Grant admitted it is not yet clear how the requirement for SMSF trustees to secure an actuarial certificate determining the allocation of earnings to members will be included in this reporting process.
SMSF trustees will need to calculate their Div 296 fund earnings as per the law and then attribute those earnings to their members in accordance with the draft regulations. The regulations may provide for the amount attributable to the interest to be determined wholly or partly by reference to an actuary’s certificate.
She indicated the ATO is already taking steps to formulate several resources aimed at providing guidance for SMSF trustees with regard to the Division 296 tax process.
“My understanding is we are [engaged] with a special working group to look at how that’s all going to play out when the regulations are finally passed,” she revealed.
The ATO will continue to co-design the administration of this new law with the special purpose working group.
“We will be looking to put out some guidance on our website as well as Law Companion Rulings on various topics that will support SMSFs,” she said.
The ATO has held targeted consultation on public advice and guidance priorities and is currently working through what guidance will be provided and when it will be released.
The impact of the Division 296 tax will be discussed in greater detail at SMSF Professionals Day 2026, co-hosted by selfmanagedsuper and Accurium. Click here to secure your seat.
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
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