Taxation of SMSF
Taxation of SMSF
Super funds, including SMSFs, receive significant tax concessions as an incentive for members to save for their retirement. However, you need to follow the tax and super laws to receive these concessions.
Generally the taxable income of a complying superannuation fund is taxed concessionally at the rate of 15%. The taxable income of a non-complying fund is taxed at the rate of 46.5%. Non-complying funds also lose various other concessions available to complying fund.
Taxation of superannuation is complex, therefore we recommend you obtain professional tax advice.
The taxable income of complying superannuation funds is taxed as follow:-
Earnings on investments in the fund
Earnings on investments in the SMSF are taxed at a rate of 15%. The effective tax rate may be less than 15% if there are capital gains tax concessions, tax deductions or tax offsets available to the SMSF. Any non-arm's length income could be considered special income by the ATO and taxed at 45%
Taxable concessional contributions
Concessional contributions are all contributions for which a tax deduction has been claimed. Generally, concessional contributions are taxed in the SMSF at 15%. If you exceed your concessional contributions cap for a financial year, an additional tax of 31.5% may be payable on the excess contributions. The concessional contribution cap for the year ended 30 June 2015 is $30,000 for under-49s and $35,000 for over-49s.
Non-concessional contributions include all contributions made from your after-tax income. As tax has already been paid on these contributions, non-concessional contributions are not taxed when they are contributed unless you exceed your non-concessional contributions cap.