Like other superannuation funds, Self‑Managed Super Funds (SMSFs) may offer a range of potential tax benefits when compared with investing outside the superannuation environment. A high‑level overview of these benefits is outlined below.
- Concessional superannuation contributions, such as Super Guarantee contributions, are generally taxed at a concessional rate of 15%.
- Investment income earned within an SMSF is typically taxed at a maximum rate of 15%, while capital gains on assets held for 12 months or more may be taxed at an effective maximum rate of 10%.
- Once you have retired and commenced a superannuation pension, investment income generated by your pension account is generally tax‑free, up to the Transfer Balance Cap (currently $1.6 million). This means no tax is usually payable on investment income, capital gains, or pension payments (provided you are aged 60 or over). Where pension assets are invested in Australian shares, the fund may also be eligible to receive franking credit refunds.
Please note that tax laws are complex and individual circumstances vary. The information provided above is general in nature and should not be considered personal advice. Clients are strongly encouraged to consult with a qualified tax adviser or financial professional before making any investment or superannuation decisions.