The impact of the Division 296 tax may extend beyond current SMSF members with total super balances (TSB) above $3 million, according to analysis of the capital gains tax (CGT) positions of funds on the Class administration software platform.
The “Class 2026 Annual Benchmark Report” released yesterday found 72.8 per cent of SMSFs had positive net unrealised CGT positions as of 30 June 2026. Further, among funds with at least one member with a TSB over $3 million, 95.4 per cent had positive CGT positions. The average unrealised gain for funds in a positive CGT position was $620,000.
As part of the transitional arrangements for the Division 296 tax, eligible small superannuation funds, like SMSFs, can make a one-off election to adjust the cost base of CGT assets held at 30 June 2026 to their market value at that date for the purposes of the impost.
The analysis revealed 8.8 per cent of SMSFs had a member TSB above the $3 million threshold, while 9.4 per cent serviced a member with a TSB between $2 million and $3 million, meaning there is a significant existing and emerging cohort that could benefit from making the CGT adjustment.
“There are potentially one-fifth of funds on Class that may need to make an election,” Class chief executive Tim Steele said.
The interim measure stipulates the election must apply to all CGT assets held by the fund at 30 June 2026, cannot be revoked and must be made by the due date for the fund’s 2026/27 tax return.
While lodgement for most SMSF annual returns is not until February of the following year, which would be February 2028 for 2026/27, if trustees are considering making an election to adjust values, they will need to establish the market value of the asset as at 30 June 2026. This may be difficult to achieve retrospectively.
“There is a lot of research trustees need to do about what is potentially a quite complex decision,” Steele indicated, noting it creates a one-off review point for accountants and financial professionals to offer specific assistance to SMSF trustees.
