Tax

An SMSF is a great tax-effective way to save for your retirement benefit. The tax in an SMSF is generally

  • 15% during the contribution stage
  • 0% in the retirement stage

 

Tax effects during the accumulation phase

An SMSF generally pays tax at 15% for income in the SMSF but would not pay tax on roll overs into the SMSF or non-concessional contributions (after tax money) added to the Fund. There are generally 3 ways to add money into the SMSF which are:

Concessional contributions
Non-concessional contributions
Roll overs into the SMSF

 

Tax effects during the pension phase

Pension payments
Lump sum payments

 

Tax on investment returns

Income
Capital Gains

 

Tax on withdrawals

The tax effects on withdrawals are as follows:

  • Pensions – Not taxable
  • Transition to retirement – add the taxable component to your personal tax return
  • Terminal illness withdrawal – not taxable

The ATO gives a summary of the tax affects of lump sum payments in the summary table here.

For more info on how your SMSF pays tax, please watch the video below.

 

 

  • MY Teo

    Hi!

    I set up a SMSF this year investing in property.
    My employer pays my Super into First State Super and it gets automatically
    taxed at 15%.

    If I change my super contributions to go directly into my SMSF, is the
    taxation still fixed at 15% or can the taxation be reduced if the SMSF
    property is making a loss?

    Thanks!

    • https://www.smsfwarehouse.com.au Superannuation Warehouse

      My,

      The tax rate in an SMSF is the same as a retail super Fund, i.e. 15 % while in the accumulation phase.

      Retail funds will deduct the 15% contributions tax immediately and leave you with 85 cents in the dollar. In an SMSF, the tax calculation is done at the end of the year. So there is a timing advantage in an SMSF. In calculating the taxable income of your SMSF, property depreciation can be deducted off the concessional contributions and other taxable income in an SMSF. Using an quantity surveyor may be to the SMSF’s advantage as the depreciation deduction is usually maximised. For more information on property depreciation look here:
      https://www.smsfwarehouse.com.au/smsf-investments/property/depreciation/

      Trust this answers your question.

      • MY Teo

        Thank you for the reply. It’s very useful.

Contact Details


logo-grey

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.