Self Managed Superannuation Funds

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SMSF Taxation Concessions

Making the most of Taxation Concessions

Concessional superannuation contributions can attract taxation deductions for the payer, subject to the limits which are in place. Non-concessional contributions do not attract taxation deductions for the payer and these are also subject to limits. It is important to understand the limits and the benefits of both types of contributions. It is also important to understand that these contributions are taxed differently when received by the fund and there are differences in the taxation implications for the recipient when the different types of contribution are paid out of the fund.

Amounts accumulating in a complying superannuation fund are taxed at the rate of 15% on earnings and 10% on capital gains. Superannuation funds which are paying pensions can qualify for taxation concessions to reduce or eliminate tax on earnings.

These concessions for pension paying SMSFs are not unlimited and there are maximum amounts which can be used to pay you a pension. 

SMSF Pensions

Superannuation fund trustees should understand the way taxation impacts on the fund’s earnings and be able to compare the overall after tax returns if members receive pensions. It should be remembered that a member does not have to be retired before they can receive a pension from their SMSF.

PKF and its accountants are not licensed financial planners and cannot advise you on making contributions or paying pensions. We can however provide you with the additional taxation knowledge you need to assess the various options which are available to you.