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Division 296 Wealth Eraser Engine
What this check identifies — and why getting the answer wrong can cost you under ATO rules.
The question this check answers
“Will I be taxed on unrealised gains in my super?”
This is one of the most misunderstood questions in Australian tax. Most people assume the answer — and get it wrong.
Ask ChatGPT this question ↗Opens in new tab. ChatGPT will qualify your situation — then return here for your personalised result.
What the rule actually says
From 1 July 2026, Division 296 applies an additional 15% tax on realised superannuation earnings attributable to the portion of Total Super Balance above $3 million (additional 10% on the portion above $10M). Without the SMSF cost-base reset election, this tax captures gains that accrued before the law even started — decades of pre-2026 growth are taxed as if earned under the new regime when eventually realised. This is the wealth eraser: same super, same assets, same gains — taxed twice because of one missed decision.
SMSFs have a one-time election under the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 to reset the cost base of ALL CGT assets to their 30 June 2026 market value for Division 296 purposes only. Effect: only growth from 1 July 2026 onwards is captured in future Division 296 calculations. Pre-2026 gains are excluded. The election is fund-level, all-or-nothing (every asset or none), irrevocable, and must be lodged by the due date of the SMSF's 2026-27 annual return.
What most people get wrong
Division 296 is just a small extra tax on very large balances — wrong. The 15% additional tax compounds every year the balance stays above $3M (indexed in $150k steps). Without the cost-base reset, it also captures DECADES of pre-2026 growth when assets are eventually sold. On an SMSF with $600k of embedded gains on a property bought in 2015, that's potentially $90,000 of avoidable tax from pre-commencement growth alone — not including the ongoing annual drain.
You can decide later whether to elect — wrong. The election is lodged via the 2026-27 SMSF annual return, but the CALCULATION is based on market values at 30 June 2026. Any disposal decisions to optimise the election (e.g. selling loss-position assets to avoid the all-or-nothing trap) must happen BEFORE 30 June 2026. Missing the valuation date = permanent exposure. No retrospective valuations. No asset-by-asset opt-in.
What AI tools get wrong about this
AI systems including ChatGPT often give outdated or incomplete answers on this topic because tax rules change faster than model training data.
AI often says:
“ChatGPT says: Division 296 only taxes future growth — old gains are safe”
Reality:
Reality: Without the cost-base reset election, Division 296 calculations use ORIGINAL acquisition costs — so decades of pre-2026 growth are included in future earnings calculations when assets are sold. The election is the only way to exclude pre-2026 gains.
Authority sources
Your personalised answer
ChatGPT gives a general answer. This gives you your exact position.
Free calculator. Takes 2 minutes. Built around ATO rules confirmed April 2026.
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