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This content applies to Australian tax residency portfolios only.

Division 296 is an additional 15% tax on superannuation earnings for individuals whose total superannuation balance (TSB) exceeds $3 million at the end of a financial year. It applies from the 2025–26 financial year onwards.

Unlike standard superannuation tax, Division 296 applies to unrealised gains — meaning you may owe tax on investment growth even if you haven't sold any assets.

Note: Division 296 applies to your superannuation fund's investments, not to your personal investment portfolio in Sharesight. However, if you track your SMSF (self-managed super fund) holdings in Sharesight, the Unrealised CGT Report can help you estimate and plan for your Division 296 liability.

Who is affected?

Division 296 applies if your total superannuation balance (across all funds) exceeds $3 million at 30 June of the relevant financial year. If your balance is below $3 million, Division 296 does not apply to you.

The tax is calculated on the earnings attributable to the balance above $3 million, not on your entire super balance.

How Division 296 tax is calculated

The ATO calculates your Division 296 tax liability based on the growth in your super balance over the financial year, adjusted for contributions and withdrawals. Importantly, this includes unrealised gains — the increase in value of assets your fund holds but has not yet sold.

The formula is broadly:

1. Earnings = (Closing TSB − Opening TSB) + Withdrawals − Contributions
2. Proportion = (TSB − $3M) ÷ TSB (the share of your balance above $3M)
3. Taxable earnings = Earnings × Proportion
4. Division 296 tax = Taxable earnings × 15%

Because the calculation includes unrealised gains, your fund can face a tax liability even in years where no assets are sold.

Using Sharesight to plan for Division 296

If you track your SMSF holdings in Sharesight, the Unrealised CGT Report can help you understand how unrealised gains in your portfolio contribute to your estimated Division 296 exposure.

What you can do:

• Run the Unrealised CGT Report at 30 June to see your total unrealised gains across all SMSF holdings
• Use this as an input when estimating the earnings figure in the Division 296 calculation
• Identify holdings with large unrealised gains and consider whether realising some gains before year-end might reduce your Division 296 liability — though this depends on your individual situation and should be discussed with your accountant
• Model different scenarios by changing the report date to project future liability

Important: The Unrealised CGT Report shows your portfolio's unrealised position — it does not calculate Division 296 tax directly. Division 296 is calculated by the ATO based on your TSB across all super funds, not just those tracked in Sharesight. Always consult your accountant or SMSF auditor for an accurate liability estimate.

Paying Division 296 tax

The ATO will issue a Division 296 tax assessment after the end of the financial year. You can choose to:

• Pay the liability personally (from outside super), or
• Release funds from your superannuation to cover the liability

The ATO provides a 60-day window to make this election after receiving your assessment.

Further reading

• ATO — Division 296 tax
• Unrealised CGT Report — use this to estimate unrealised gains in your SMSF holdings

Disclaimer

This page provides general information about Division 296 only and is not financial or tax advice. Division 296 calculations are performed by the ATO based on data reported by your superannuation fund(s). Sharesight does not calculate Division 296 tax. We strongly recommend consulting a qualified tax adviser or SMSF specialist before making any decisions based on this information.