For SMSF trustees, a reversionary pension can create more than personal super consequences — it may also materially alter fund-level tax treatment.
The Key Rule:
If a member’s TSB exceeds $1.6 million at 30 June, the SMSF may lose access to segregated pension asset tax treatment in the following year (subject to exceptions).
Why This Matters:
Segregated pension assets may allow:
- Fully tax-free capital gains on pension assets
Without segregation:
- Capital gains may become partially assessable
Major Timing Issue:
A reversionary pension may increase TSB before TBC credits arise, unexpectedly changing next year’s SMSF tax strategy.
Contact Us
Own an SMSF and have inherited a reversionary pension? Contact us here to discuss the potential tax implications.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.