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Self manage super fund

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Newbie

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Hi

 

I am wondering if the earnings earned by the accumulation account are still taxable @15% while the retirement phase account is involved? Thanks.

 

Xin.

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Devotee Registered Tax Practitioner

Replies 0

Yes, I mean having accumulation account as well as retire phase pension.

 

OK.  SMSF earnings are allocated in a fair way across both accounts, then you need an actuary report to tell you what percentage of the income is exempt from income tax. 

 

Alternatively, if the investment assets are segregated (meaning that the assets are divided into 2 groups, accum and pension, and the income from each group kept to that group) the actuary report is not required.  Easy to say, but quite difficult to do in practice.

 

We are wondering whether it's taxable on the earnings or contribution ( I'm sure cont is ) earned by the accumulation account.

 

Concessional contributions are always taxable.  Earnings are taxable in proportion to the accum account  e.g.

 

Accum  accounts                              =      50,000    =   25%

Retirement phase pension accounts =    150,000   =   75%

Taxable income                                 =     10,000

 

Tax  =   10,000  x   25%   x    15%    =   375

 

Warning  -  This is all grossly oversimplified in order to make an easy explanation and example.

 

 

 

3 REPLIES 3
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Devotee Registered Tax Practitioner

Replies 2

while the retirement phase account is involved?

 

Do you mean after converting acumulation to a retirement phase pension?

 

Or, having an accumulation account as well as a retirement phase pension?

 

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Newbie

Replies 1

Hi Bruce

 

Yes, I mean having accumulation account as well as retire phase pension.  Thanks. 

 

We are wondering whether it's taxable on the earnings or contribution ( I'm sure cont is ) earned by the accumulation account.

 

Thanks,

Xin

Highlighted

Best answer

Devotee Registered Tax Practitioner

Replies 0

Yes, I mean having accumulation account as well as retire phase pension.

 

OK.  SMSF earnings are allocated in a fair way across both accounts, then you need an actuary report to tell you what percentage of the income is exempt from income tax. 

 

Alternatively, if the investment assets are segregated (meaning that the assets are divided into 2 groups, accum and pension, and the income from each group kept to that group) the actuary report is not required.  Easy to say, but quite difficult to do in practice.

 

We are wondering whether it's taxable on the earnings or contribution ( I'm sure cont is ) earned by the accumulation account.

 

Concessional contributions are always taxable.  Earnings are taxable in proportion to the accum account  e.g.

 

Accum  accounts                              =      50,000    =   25%

Retirement phase pension accounts =    150,000   =   75%

Taxable income                                 =     10,000

 

Tax  =   10,000  x   25%   x    15%    =   375

 

Warning  -  This is all grossly oversimplified in order to make an easy explanation and example.