Tax is a SMSF is calculated at 15% of taxable income.

There are two types of taxable income - income of a revenue nature and income of a capital nature. Note that capital losses can't be offset against revenue gains for the calculation of taxable income. Capital losses are quarantined and can only be utilised against capital gains.

When a SMSF goes into pension mode, all gains become tax free. So you won't pay any tax on your SMSF income. This is the objective of a SMSF to move to a tax free environment.

Example:

The SMSF bought BHP shares at $10 per share. If yhe SMSF keeps this until retirement phase and sell the share at $45, the total gain of $35 will be tax free.

When you reach pension phase it is generally best to leave as much income as possible in the SMSF. There is a draw down minimum that has to be taken up anually but its best to leave income in the SMSF as you don't pay tax on it.

Question: My SMSF has $10,000 from bank interests but the SMSF investment portfolio (shares) is down about $4,000. Can the SMSF offset losses from the portfolio against the bank interests if the SMSF sells the shares?

Answer: Short answer - NO. Shares are held on capital account and losses onI these will be quarantined. Only capital gains can be applied against these losses. Interest is of a revenue nature and will be taxed at 15%. Expenses that can be offset against this can not be of a capital nature. You can deduct bank fees, accounting and auditing costs.

2011 Annual Return

If you are a client of Superannuation Warehouse we act as your Tax Agent and complete and submit your SMSF tax return. If your SMSF use a registered Tax Agent like Superannuation Warehouse, the SMSF gets an extension to submit its tax return. The Tax Return is generally due 15 May the following calendar year, i.e. 10.5 months after the year end.

For a copy of the SMSF tax return, click here and an instruction on how to complete this SMSF tax return, download it here.

SMSF Supervisory Levy

The SMSF Supervisory Levy has been increased for the 2011 year. This increased from $150 (2010) to $180 (2011). The Supervisory Levy is payble when you lodge your annual return.