SMSF Tax Rates

Different tax rate applies to the taxable income in an SMSF based on the following circumstances:

• type of income
• accumulation mode or pension mode of the SMSF
• has the investment been held in the SMSF for 12 months?
• is the income arm’s length income?

Basically, there are four tax rates apply to the income in an SMSF, eg 15%, 10%, 0%  and 45%.

What income 15% tax rate will be applied?

• concessional contribution

If the SMSF member balance is accumulate phase or has commenced a transition to retirement pension, 15% tax rate will be applied to the below income:

• dividend, distribution, interest, foreign income
• captain gains from assets have owned less than 12 months

What income 10% tax rate will be applied?

• captain gains from assets have owned more than 12 months

What income 0% tax rate will be applied?

• non concessional contributions

If the SMSF member pension phase, 0% tax rate will be applied to the below income:

• dividend, distribution, interest, foreign income
• captain gains

What income 45% tax rate will be applied?

Non-arm’s length income will be taxed at 45% regardless whether the member balance is in accumulate mode or pension mode or not.

Normally non-arm’s length income include the following:

1. dividend from private companies
2. income from a discretionary trust
3. income from investments that have non-commercial conditions
4. income from a non-commercial scheme