In this article, you will learn how to assess, record, and process Division 296 cost base adjustments in Class:
- Overview
- Reports
- Record cost base adjustment decision
- Process cost base adjustment
- Calculating the capital gain/loss position
- Worked example
Overview
Division 296 introduces a secondary cost base that is tracked alongside the standard capital gains tax (CGT) cost base. This is used to calculate a modified CGT outcome when determining Division 296 earnings.
- A cost base adjustment can be applied as at 30 June 2026
- The election applies to all CGT assets in the fund
- Partial selection is not available
Class maintains two cost bases per parcel:
- Standard CGT cost base
- Division 296 adjusted cost base
Recording a Division 296 cost base adjustment is a two-step process:
- Record the decision
- Process the adjustment after year-end processing is complete
The election must be made by the due date of the FY2027 tax return. Once executed by the trustees, the decision is irrevocable.
Reports
To help you assess and document the election the following reports are available:
- Div 296 Cost Base Adjustment Analysis Report
Review the estimated capital gain/loss position at 30 June 2026 - Div 296 Cost Base Adjustment Minute/Resolution
Documents the trustee decision
The ATO will release a prescribed form at a later date. Once available, Class will support this form and pre-populate it with the recorded decision. This form does not need to be lodged with the ATO.
Step 1: Record cost base adjustment decision
Navigate to Fund Level > Periodic Processing > Div 296 cost base adjust
Record whether the fund will apply the Div 296 cost base adjustment:
- Default is No for all funds
- Select Yes to elect and save
- This step records the intention only and does not process the adjustment.
Step 2: Process cost base adjustment
- Review the calculated capital gain/loss for holdings and parcels
- You can manually enter a capital gain/loss for a Custom Holding accounts by selecting Edit. This is part is optional as this number is not carried forward. It is only used to populate the overall capital gain/loss position.
- Click Submit to process the cost base adjustment
Tax Finalisation for FY2026 must be run before the Submit option is enabled. This ensures all processing is complete prior to processing the cost base adjustment.
Field Descriptions
The following fields are displayed when processing the adjustment:
- Code: Holding code of the investment
- Price Valuation Date: Date of the market valuation (available after Period Update)
- Gross Capital Gain/ (Loss): Total gross capital gain or loss for the holding account
- Parcel Date: Purchase date of the parcel
- Accounting Cost Base: Accounting cost base for the parcel
- Cost Base: Tax cost base (reduced cost base where a loss applies)
- Market Value: Market value for the investment
- Gross Capital Gain/ (Loss): Market value minus the Tax cost base
- Total Gain/ (Loss): Total gain or loss for all CGT assets
-
Submit or Delete: To submit or delete the cost base adjustment for Div 296 purpose. Once FY2027 Tax Finalisation is complete you can't edit this screen.
Additional Considerations'
- Modified events: If events are recorded after the Period Update for FY2026 has been run, these changes are not reflected in the Division 296 cost base adjustment
- Custom Holding accounts: Capital gains/losses are not automatically tracked but you can enter a Div 296 capital gain/loss manually under the Realised Accounting Gain event (available from end of July 2026)
- Property accounts: Where the setting Adjust Valuation by Accumulated Depreciation the unadjusted value of the property is used as the Div 296 adjusted cost base