From the evening of 26 June 2026, you now have the tools you need to model and manage the Division 296 tax for an accumulation super account (including untaxed) and an SMSF in CALM Xtools+.  This update brings core calculations to CALM Xtools+, giving you more time to assess strategies ahead of key legislative milestones.

This release provides you with the following foundational capabilities.

• Project the $3 million and $10 million thresholds forward, indexed to the Consumer Price Index.
• Calculate total earnings across super accumulation and account-based pensions (including untaxed and SMSF).
• Track exactly when your clients are likely to become liable for the tax.
• Fund the tax liability from personal cash flow or super/SMSF accumulation accounts.
• Toggle the SMSF cost base reset option and either manually enter or automatically calculate specific cost bases.
• Manage specific exemptions and concessions, including for structured settlement contributions and state higher-level office holders.
  

Below we walk you through the details, including the SMSF complexities.

You can also access eLearning on the Iress Learning Centre, which combines interactive elements, videos, and knowledge checks to help reinforce key points.

🚀 Release

This update was released Friday 26 June 2026.

🔎 Contents

• Legislative Data
• Thresholds and earnings calculations
• Limits and Thresholds Display
• Controlling cashflow and release from super
  • Impact on Total Super Balance
• Applying exemptions and exclusions
  • Turn off the tax
  • Exclude untaxed earnings for state higher level office holders
• The SMSF Cost Base Reset Election
• Detailed calculations for SMSF Division 296 earnings
• Deciding whether to apply the Cost Base Reset Election
• Xmerge Codes
• Future updates
• Sharing your feedback

Legislative Data

The calculations use the following legislative data, sourced from the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. 

Tax Thresholds:

• Primary Threshold: $3 million (Large Superannuation Balance).
• Secondary Threshold: $10 million (Very Large Superannuation Balance).
• Indexation: Annual adjustment to CPI, indexed in $150,000 (primary) and $500,000 (secondary) increments, aligned with the Transfer Balance Cap.
• Tax Rates:
  • Lower Tier: 15% on earnings between $3m and $10m.
  • Upper Tier: 25% on earnings above $10m.
• Large APRA Fund Adjustment Factors: The "prescribed adjustment factors" for Large APRA Funds (Accumulation/Untaxed/Account Based Pension) as defined in the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Regulations 2026.
  Because it is highly complex for large APRA-regulated funds to individually reset the cost base of millions of underlying assets to their 30 June 2026 market value (which is the method available to SMSFs), this factor method provides transitional relief.
  Instead of tracking specific asset values, the fund simply takes its overall net capital gain and multiplies it by the following prescribed factors:
  • 2026-27 income year: 0.2
  • 2027-28 income year: 0.4
  • 2028-29 income year: 0.6
  • 2029-30 income year: 0.8

Xtools Legislative data for Division 296 was quietly updated along with Xplan Leg Rates 2026-27 Budget: Medicare Levy Low Income Thresholds.

Thresholds and earnings calculations

You have full visibility over your clients' Division 296 tax projections. The system automatically calculates total earnings and tracks them against legislative thresholds.

• Project thresholds: You can view the primary $3 million and secondary $10 million thresholds on the Rates and Thresholds page in Xtools+. These index automatically to the November Consumer Price Index using $150,000 and $500,000 increments.
• Calculate total earnings: We automatically calculate total earnings across all accumulation super and account-based pension accounts. The system applies the prescribed adjustment factors for large APRA funds to capital gains earnings. Note that the super projections in the Xtools generally make the conservative assumption that the ⅓ capital gains discount does not apply, as assets have not been held for at least 12 months. 
• Identify liability dates: You can track exactly when your clients become liable for the tax.

Limits and Thresholds Display

You can see details of the Division 296 calculations at the bottom of the Limits and Thresholds Display page at Display > Individual > Super > Client > Limits and Thresholds. 

The hyperlink shown below the header shows you the financial year in which we calculate your client first becomes liable for the tax, as well as the option applied regarding payment of the tax. 

The calculations apply the “higher of” rule for total super balance, which prevents individuals from making large temporary withdrawals just before June 30 to dodge the tax. This includes the special transitional rule for 2026/27, which uses only the closing total super balance for that financial year.

In Xtools+, the "prescribed adjustment factors" for Large APRA Funds are applied to Superfund 1 and Superfund 2 in the row > Percentage Assessable for Retail Funds. Note that when you override the 100% percentage of capital gains that are generally assessable for Retail Taxed Super funds, this is applied before the prescribed adjustment factors.

Controlling cashflow and release from super

You can control exactly how the tax impacts your client's projected balances. 

• Timing: The system calculates the tax from 1 July 2026 and includes the first Div 296 liability in projections at the end of the 2026/27 financial year.
• Included as an expense: By default, the system includes the calculated tax in your client's cashflow as an expense.
• Release from super: You have the option to fund the tax liability directly from the projected balance of Superfund 1, Superfund 2 (including Untaxed) or SMSF accumulation accounts. You can choose prorata, which apportions the tax according to total super balance or to select one particular fund for it to be deducted from first. You cannot show the tax being deducted from account-based pension accounts.
• Adjust settings: You can manage these deduction settings by clicking the popup hyperlink at Individual> Input > Super > Client/Partner > EOP Transactions > Release of Tax, as shown below:

You can also change the settings from many other pages, including: 

• Input > Individual > Superannuation > Client/Partner > Regular CCs >  Taxes
• Display > Individual > Cashflow > Cashflow Consolidated 
• Display > Individual > Cashflow > Taxation
• Display > Individual > Superannuation > Client/Partner > Limits & Thresholds
• Display > SMSF > Cashflow > Cashflow Consolidated 
• Display > SMSF > Assets > Working Cash Account

Impact on Total Super Balance

Total Super Balance is calculated at the top of  Display> Individual > Superannuation > Client/Partner > Limits & Thresholds. 

As noted earlier, the system includes the Div 296 liability in projections at the end of the applicable financial year and deducts it from cashflow by default.

When you set the Div 296 to be paid from superannuation, the release amounts are added back to the calculated Total Super Balance, so the Div 296 tax calculations in the next year is based on a realistic balance.

Applying exemptions and exclusions

You can tailor the calculations to fit your clients' unique circumstances and switch off the tax entirely for specific accounts.

Turn off the tax 

You can use a toggle to turn off the tax completely for clients who are exempt, such as those holding a child allocated pension or who have received a structured settlement and made a personal injury contribution.

To turn off the tax, set Div 296 Tax Applies to No. 

This input can be accessed in the various screens noted above under Controlling cashflow and deductions. 

Below we see the screen for Input > Individual > Super > Client > Regular CCs.

Exclude untaxed earnings for state higher level office holders

If your client is a state higher level office holder with an untaxed fund, you can apply special Division 296 treatment to exclude the earnings from the untaxed fund from the calculation of Division 296 tax. Note that the balance of the Untaxed Fund will still be included when calculating Total Superannuation Balance for the Division 296 calculations.

You can find the setting at Input > Super > Client/Partner > Accounts under the heading for the Superfund 2, provided the Plan Type is set to Untaxed. To apply the setting, set it to Yes.

The SMSF Cost Base Reset Election 

The "cost base reset" is a transitional mechanism designed to ensure that the Division 296 tax only applies to SMSF capital gains made after 1 July 2026. For Division 296 purposes only, a SMSF trustee can choose to treat the "cost" of an asset as its Market Value on 30 June 2026. If you make the election, it applies to every CGT asset held by the fund on 30 June 2026 (shares, property, etc.). The election must be made with the fund's 2026–27 tax return.

A Cost Base Reset setting has been included in Xtools+ so you can evaluate the impact of making the election, or not.  The setting is accessible from the new SMSF Key Details screen shown below. 

The setting is also accessible from Input > SMSF Admin > Assets Financial Holdings AND > Property.

For projections starting on or before 1 July 2026, the system automatically calculates the 1 July 2026 cost base using your clients' SMSF asset balances. 

For projections starting after 1 July 2026, you can manually enter the specific Division 296 cost base for each individual SMSF asset or property.

The input for the cost base reset election can also be accessed in most of the screens and pop-ups noted above under Controlling cashflow and deductions. 

Detailed calculations for SMSF Division 296 earnings

You can see the apportionment of SMSF Division 296 earnings as well as the Division 296 capital gains tax calculations at the bottom of the SMSF Taxation Display i.e. Display > SMSF Admin > Cashflow > Taxation. 

SMSF Division 296 earnings are apportioned using its account balances after all of the SOP transactions.

Below we see an example where the Cost Base Reset election has been applied.  The general capital gains tax calculation for the SMSF is shown under Income.

The capital gains portion of the SMSF Division 296 earnings are calculated differently using the 1 July 2026 asset balances as a cost base when the cost base reset election has been applied. 

In this example we can see the special treatment of Division 296 capital losses. The Explanatory Memorandum to Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 noted that: 

“The additional use of capital losses only applies to the calculation of the net capital gain for Division 296 purposes for that income year. In other words, in the following income year, the fund will still have available its usual balance of carried forward capital losses to be applied in working out its net capital gain, including for Division 296 purposes”. 

Therefore in this case, the Division 296 capital loss realised in 2026/27 ($100,070) can only be used to offset Division 296 capital gains in the same financial year. Since no other Division 296 capital gains were realised in that financial year to use it up, the $100,070 remains unused and cannot be carried forward. 

When the SMSF realises a Division 296 capital gain in 2027/28, the usual balance of carried forward capital losses (the general capital loss of $200,070, realised in 2026/27) offsets the Division 296 capital gain. 

Deciding whether to apply the Cost Base Reset Election

You can see how the SMSF Division 296 earnings affect the individual’s Division 296 liability at Display > Individual > Superannuation > Client/Partner > Limits & Thresholds.  

In the following case we see that Income earnings included from the Perfect Super SMSF starts from $65,987 in 2026/27 and the capital gains assessed are generally Nil, except for 2027/28, when capital gains of $968,150 are included and Bob’s Division 296 tax liability increases from $6,787 in 2026/27 to $106,474 in 2027/28.

You can click the hyperlink below the Div 296 heading to toggle the Cost Base Reset option or deduct the tax from Super. 

When we turn off the Cost Base Reset election, the capital gain for 2027/28 increases to $2,043,633 and Bob’s Division 296 tax increases to $217, 086.

Xmerge Codes

You can code your documents to include Division 296 recommendations and outputs by using the Xmerge Codes available for these new features. 

The codes are collated in the Xmerge Library.

Future updates

• Refined calculations: These will incorporate the treatment of defined benefit interests, following clarification on family law valuation factors.
• Whole of Wealth reporting: New capabilities to compare tax outcomes across different entities will be introduced.

Sharing your feedback 

We are committed to developing tools that align with your workflow and highly value your insights.

Should you have any questions about this Xtools+ update, please don't hesitate to reach out to us. You can contact our Help Desk at 1300 1300 69, speak directly with your Relationship Manager, or use Xtools Connect.

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