SMSF tax benefits explained

One reason people consider a self-managed super fund (SMSF) is the concessional tax treatment available within the super system.

SMSFs come with additional responsibilities, but they may also provide tax benefits that aren't available when investing outside super.

Here's a look at some of the key tax benefits available to complying SMSFs.

General information only: This article doesn't take your personal circumstances into account and isn't tax, financial or legal advice.

1. Earnings generally taxed at up to 15%

In the accumulation phase, investment earnings are generally taxed at a maximum rate of 15%.

This includes income such as:

• Dividends

• Interest

• Rental income

• Capital gains

If your SMSF sells an eligible asset after holding it for at least 12 months, it may also receive a capital gains tax discount, which can reduce the effective tax rate on the discounted gain to 10%.

2. Earnings may become tax-free in retirement

When a member starts a retirement phase pension and meets the relevant conditions, investment earnings supporting that pension are generally exempt from tax within the SMSF.

Depending on your fund, this can apply to dividends, rental income, interest and capital gains.

Limits and eligibility rules, including the transfer balance cap, still apply.

3. Eligible SMSF expenses may be tax deductible

An SMSF can generally claim deductions for eligible expenses incurred in running the fund or earning assessable income.

These may include:

• Accounting fees

• Annual audit fees

• Investment management fees

• Bank fees

• The ATO supervisory levy

• Eligible insurance premiums

• Certain property expenses

4. Franking credits can reduce tax

If your SMSF invests in Australian shares, it may receive franking credits attached to fully franked dividends.

These credits can reduce the amount of tax payable by the fund. In some circumstances, excess franking credits may be refundable.

5. More flexibility over capital gains

With an SMSF, trustees control when investments are bought and sold. That flexibility can help manage when capital gains are realised, while remaining compliant with superannuation and tax laws. 

How Stake Super can help

Running an SMSF comes with ongoing tax and compliance obligations.

Stake Super helps simplify the admin with annual accounting, tax return preparation and audit coordination. That gives you more time to focus on managing your investments.

Ready to take control of your super?

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Get started online or speak to a Stake Super specialist.

This is not financial product advice, nor a recommendation that a self-managed super fund (‘SMSF’) may be suitable for you. Your personal circumstances have not been taken into account. SMSFs have different risks and features compared to traditional superannuation funds regulated by the Australian Prudential Regulation Authority (‘APRA’). Stake SMSF Pty Ltd, trading as Stake Super, is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up an SMSF. When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment and administration of an SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. For more information about SMSFs, see our SMSF Risks page.

Ciara Conway

Commercial Manager - Stake Super

Ciara is a Commercial Manager at Stake Super, with over 10 years of experience in the SMSF industry and an MA in Accountancy and Finance from Heriot-Watt University in Edinburgh, United Kingdom. Having previously worked at a chartered accounting firm and one of the largest SMSF administrators in Australia, Ciara has extensive knowledge of SMSF compliance. She is also a current member of the SMSF Association.