CGT in an SMSF
Capital Gains Tax (CGT) is the tax an SMSF may be required to pay when you sell an asset that has increased in value. Some assets subject to CGT tax include property, shares, managed investments and cryptocurrencies.
SMSF’s are generally taxed at a 15% rate on taxable income, including CGT. However, for assets that are held for more than 12 months, a CGT discount may apply, reducing the effective tax rate on CGT to 10%
When an SMSF is in pension phase, capital gains on assets supporting that pensionare generally taxed at 0%. This can provide significant tax benefits for SMSF members in retirement, particularly when selling assets that have increased substantially in value. Where an SMSF pays a partial pension, only the proportion of the fund’s income attributable to assets supporting the pension may be exempt from tax under the Exempt Current Pension Income (ECPI) rules; any remaining portion, including the relevant capital gain, may be subject to CGT. An Actuarial Certificate is required to determine the ECPI.
You can refer to the breakdown below:
| Assets owned over 12 months | Assets owned under 12 months | |
| Member has NOT commenced pension | 10% | 15% |
| Member has commenced pension | 0% | 0% |
| Member partially in pension | Based on the Funds ECPI | Based on the Funds ECPI |
Changes to CGT
Capital Gains Tax (CGT) has undergone significant proposed changes recently, with the Australian Government announcing reforms as part of the 2026–27 Federal Budget. These changes affect how capital gains are taxed, It is important for Trustees to understand the current rules and how they may apply to your circumstances.
From 1 July 2027 the 50% CGT discount will be replaced by a minimum 30% tax rate on capital gains. These changes apply to personal and company tax, with superannuation continuing under its own tax treatment.
Q & A
Will the proposed CGT changes affect SMSFs?
No, the proposed CGT changes will not affect SMSF’s. Which will continue to be taxed at 15% on taxable capital gains where the asset has been held for less than 12 months, or an effective rate of 10% where an eligible asset has been held for more than 12 months
Is obtaining an accurate valuation each financial year important for future CGT events?
Yes. Accurate annual valuations provide a reliable record of an asset’s market value and can help ensure any future capital gain or loss is calculated correctly when the asset is sold.
As Trustees, it is important to understand the tax implications of your SMSF and stay informed of any changes that may affect your fund, with more information about tax in an SMSF available here.