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  • Self-managed super funds and tax exemptions on pension assets

    You may be able to claim a tax exemption in the SMSF annual return – for certain income – once your SMSF starts paying super income stream benefits (commonly referred to as pensions).

    Claiming this tax exemption

    Ordinary income and statutory income a complying SMSF earns from assets held to provide super income stream benefits is exempt from income tax. This is referred to as exempt current pension income (ECPI).

    The ECPI exemption can be claimed by all complying super funds (including SMSFs) currently paying super income stream benefits. However, an SMSF paying such a benefit is not automatically entitled to the exemption – it must meet certain other conditions.

    To claim the ECPI exemption in the SMSF annual return, there are steps you must take before starting to pay the super income stream benefit. This includes ensuring all of the SMSF's assets are re-valued to their current market value.

    See also:

      Last modified: 05 Sep 2017QC 21546