RSM Australia

Choosing capital gains tax relief

A key component of the Fairer Super reforms is the ability for superannuation funds impacted by the reforms to revalue their assets to their current market value for taxation purposes.

For many superannuation funds, this provides an opportunity to lock in capital gains made on assets to 30 June as tax free gains. The increase in value from the end of the financial year being taxable going forward.

There are however many considerations for SMSF trustees in determining whether to choose the relief:


When to decide

The decision is needed by the due date of the annual return lodgement, which in many cases will be May 2018.  However as the election to choose the relief forms part of the annual return, the choice needs to be made at time of lodgement of annual return. This can potentially delay the refund of excess franking credits to the fund.Superannuation

To defer or not to defer… 

For some funds the choosing of CGT relief may result in some tax being payable on the revalued assets, which will generally be when the fund has some benefits that are not supporting pensions.  A decision needs to be made on whether any tax is paid as a part of the 2017 annual return or deferred until the underlying assets are sold

What about carried forward capital losses? 

Some SMSF’s have carried forward capital losses from the disposal of investments in the past.  Consideration should be given to how choosing CGT relief impacts on the carried forward losses and preserving the maximum amount of losses into the future.


The potential to lock in tax free capital gains as a part of these reforms will be attractive to many SMSF trustees.  However there are significant traps that could result in additional tax being payable into the future and the consequences of choices made now into the future need to be considered.


Do you need assistance in knowing whether to choose the relief?

At RSM we can help, contact your local RSM superannuation specialist today to assist you in your planning.