Tax on assessable income 

The rules for the taxation of an SMSF are the same as for any super fund. You can review the specific superannuation taxation rules in our taxation and superannuation modules. 

In summary, if an SMSF is complying, assessable income earned in the accumulation phase is generally taxed at 15%. In pension phase, the tax rate on earnings reduces to 0% (fund balances in pension phase are restricted to no more than $2.1 million for 2026/27, depending on an individual’s personal Transfer Balance Cap). Concessional contributions are added to the assessable income of the fund in accumulation phase and taxed at 15%.  

Some income is taxed at special rates: 

• For realised capital gains on assets that have been owned for at least 12 months, a one-third discount is applied to reduce the capital gain.
• Non-arm’s length income is taxed at 45%.
• The earnings on assets held to pay pensions is exempt from tax.
• Income in a non-complying super fund is taxed at 45%.

If an arrangement is in place which is not set up on an arms’-length basis and the SMSF receives an advantage as a result, the earnings may be taxed at the penalty rate of 45% instead of 15%. An example is an investment in a private company owned by members of the fund.

Tax deductions can be claimed for eligible expenses incurred on super accounts in accumulation phase.