Tax Smarts: Superannuation and Capital Gains Made Simple
Superannuation is often called Australia’s most tax-effective investment vehicle. Yet many pre-retirees don’t fully understand how the tax rules work – or how to use them to their advantage.
Contributions and Tax
- Concessional contributions: taxed at 15% (30% for very high earners).
- Non-concessional contributions: not taxed on entry; earnings taxed at 15%.
Capital Gains Inside Super
When investments are sold within super:
- If held >12 months: effective tax 10%.
- In retirement phase: often tax-free.
Transition to Retirement
From preservation age, you may start a Transition to Retirement pension, drawing income while still working.
Final Thought
The principle is simple – super reduces tax and grows savings faster. Using it wisely in the lead-up to retirement can make a big difference.
References
- Australian Taxation Office (ATO). Taxation of Superannuation, 2024.
Disclaimer: This information is of a general nature only and does not constitute advice. It has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances. Hendrie Financial Strategies is a corporate authorised representative of the Madison Financial Group Pty Ltd, Australian Financial Services License No 246679, ABN 36 002 459 001.
