CGT rules within an SMSF
Capital Gains Tax (CGT) is an important consideration for SMSF trustees when an SMSF sells or disposes of an asset. Generally, SMSFs are taxed at a rate of 15% on assessable capital gains. However, if an eligible asset has been held for more than 12 months, a one-third CGT discount applies, effectively reducing the tax rate on the discounted capital gain to 10%.
Where an SMSF is in full pension phase, capital gains on assets are taxed at 0%. Where an SMSF is partially in pension phase, the taxable portion of the capital gain is determined based on the Fund’s Exempt Current Pension Income (ECPI). An Actuarial Certificate is required to determine the ECPI, with a fee of $280.
The following table shows the tax rates under different situations:
| Assets owned over 12 months | Assets owned under 12 months | |
| Member has NOT commenced pension | 10% | 15% |
| Member fully in pension | 0% | 0% |
| Member patially in pension | Based on the Fund’s ECPI | Based on the Fund’s ECPI |
Q & A
Do the proposed changed to personal CGT rules from 1 July 2027 apply to SMSFs?
No, the proposed changes to personal CGT rules do not affect the CGT rules applicable to SMSFs. SMSFs have their own specific CGT rules, including a one-third CGT discount for eligible assets held for more than 12 months, resulting in an effective tax rate of 10% on the discounted capital gain.
Is it important to obtain an accurate valuation each financial year for future CGT events?
Yes., accurate annual valuations provide a reliable record of an asset’s market value and can assist in accurately calculating any future capital gain or loss when the asset is sold or disposed of.
Understanding the tax treatment with in an SMSF is important for managing your Fund and meeting its tax obligations. We explain the different types of SMSF tax and how they may apply to your Fund in here.