SMSF

The first step is to separate two ideas that people routinely merge. The first is tax on the fund's investment earnings — the rent, dividends, interest and capital gains the fund'sAssetsgenerate. The second is tax on the benefits a member receives — the pension …

An account-based pension is legally a commitment to pay an income stream from a defined starting capital. When the pension begins, its opening balance is set, and so is its “tax-free/taxable” proportion — the split between the tax-free and taxable components, fixed at commencement …

When an SMSF supports a retirement-phase pension, theEarningson theAssetsbacking that pension are exempt from tax — this is exempt current pension income (ECPI) ATO exempt current pension income. The certificate'sJobis to state, for a fund using the proportionate method, what proportion of the fund's …

The central principle is timing: the pension must be established before any pension payment leaves the fund. A payment made before the pension has properly commenced is not a pension payment — at best it is a lump sum or, at worst, an unauthorised …

When your SMSF starts paying you a retirement-phase pension, it must pay at least a minimum amount in actual cash each year. The minimum is a percentage of your 1 July pension balance that rises with age — 5% at 65-74, climbing to 7% …

Your preserved benefits are, by design, locked away until certain events occur. The law calls these events conditions of release. Reaching your preservation age is a gateway, but it is not a condition of release on its own ATO conditions of release. As the …

A TTR income stream is an account-based pension you can start once you reach preservation age but before you have fully retired or turned 65. Its defining feature is that it is “non-commutable”: because you have not yet met a full condition of release, …