Tax rates and returns

There are two types of taxable income: income of a revenue nature and income of a capital nature. Note that capital losses can’t be offset against revenue gains for the calculation of taxable income. Capital losses are quarantined and can only be utilised against capital gains.

When an SMSF goes into pension mode, all gains become tax free. So the Fund won’t pay any tax on its SMSF income. Moving into a tax free environment is one of the main objectives of an SMSF.

Example:

An SMSF bought BHP shares at $10 per share. If the SMSF keeps these until the retirement phase and sells the shares for $45 each, the total gain of $35 per share will be tax free.

Question: My SMSF has $10,000 from bank interests but the SMSF investment portfolio (shares) is down about $4,000. Can the SMSF offset losses from the portfolio against the bank interests if the SMSF sells the shares?

Short answer: NO. Shares are held on capital account and losses on capital account will be quarantined. Only capital gains can be applied against these losses. Interest is of a revenue nature and will be taxed at 15%. Expenses that can be offset against this cannot be of a capital nature. You can deduct bank fees, accounting and auditing costs.

Annual Taxation Returns

If you are a client of Superannuation Warehouse we act as your Tax Agent and complete and submit your SMSF tax return. If your SMSF uses a registered Tax Agent like Superannuation Warehouse, the SMSF gets an extension to submit its tax return. The Tax Return is generally due 15 May the following calendar year, i.e. 10.5 months after the year end.

For a copy of SMSF annual returns and instructions on how to complete the tax return for recent years, click on the links below.

SMSF Supervisory Levy

There is a fee payable by all SMSF’s on an annual basis called the Supervisory Levy. This fee is payable to the ATO and it enables them to perform their function as Regulator. We have a page discussing the SMSF Supervisory Levy in more detail.

Nil Tax Returns

When an SMSF is newly set up and there are no transactions at 30 June of that financial year, an RNN (Return Not Necessary) may be lodged. The purpose of lodging a RNN  is to advise the ATO that there are no transactions in the SMSF. The ATO gives some guidance on how to complete a RNN. Remember, a RNN can only be submitted once. In order to lodge a RNN, the ATO usually require a copy of the SMSF’s bank statement noting the Fund is activated and contributions or roll-overs have been deposited into the SMSF bank account.

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Peace Of Mind

We are Melbourne based with clients throughout Australia. Our SMSF administration service is mostly paperless. This enable us to charge a fair fee, resulting in a good value-proposition for you.

No Advice

Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.