I would like to clarify tax treatment for a person over 60, who has total super of say $750K. I believe any payments made from a SMSF are free of tax. I think though that any earnings inside the fund are still subject to the 15% earnings tax. And tax on contributions from an employer is still 15%. Is this right?
Thanks
A: Thanks for the question.
- Yes, provided the recipient is over 60 and the payment is not from an unfunded source (defined benefit scheme), payments are free of tax;
- Investment earnings inside the fund (SMSF) are subject to a 15% tax, unless the investments wholly support the payment of a super pension, in which case they are taxed at 0%; and
- Concessional contributions, which include the employer’s 9.5%, salary sacrifice contributions and any contributions you claim a tax deduction for, are taxed at 15% at source. If you earn more than $250,000, an additional tax of 15% applies (known as Division 293 tax).
Hope this is clear
regards
