Inside Super: Capital Gains Tax Planning for Australians Aged 30–55.

Selling investments like shares or property outside of super can trigger significant capital gains tax (CGT). But when those assets are held within your super fund, they’re subject to much lower tax rates—and in some cases, no tax at all. For Australians aged 30–55, understanding how CGT works inside super can unlock powerful savings and boost your retirement strategy.

CGT Inside Accumulation Phase Super

During your working years, most super is in the accumulation phase. In this phase, investment earnings—interest, dividends, and capital gains—are taxed at a flat rate of 15%. However, if an asset is held for more than 12 months, the fund receives a one-third CGT discount, reducing the effective tax on capital gains to just 10%.

That’s a stark contrast to the top marginal tax rate of up to 47% outside super, making accumulation-phase super a tax-smart environment for long-term investing. This discount applies equally to large APRA funds and self-managed super funds (SMSFs), provided the asset meets the minimum holding period from acquisition to sale contract date.

Zero CGT in Pension Phase

Once you satisfy a condition of release and commence a retirement-phase income stream, investment earnings—including capital gains—on assets supporting that pension become entirely tax-free.

This exemption makes the pension phase one of the most powerful wealth-building tools in the Australian super system. However, if your fund holds both accumulation and pension assets, the exemption applies proportionally—unless assets are formally segregated. In those cases, careful documentation and actuarial support may be required to claim the Exempt Current Pension Income (ECPI) accurately.

Strategic Timing to Maximise CGT Discounts

Timing matters. Selling assets held less than 12 months means missing out on the CGT discount, resulting in a flat 15% tax. For instance, delaying a sale by even a few weeks to cross the 12-month mark can reduce the tax payable on the gain by a third.

Super funds—particularly SMSFs—can leverage this rule strategically, deferring disposals to optimise tax treatment. However, this must be balanced with investment risk and market timing.

Using Contributions to Offset Personal CGT

Selling an asset outside super? You can’t transfer the gain directly into super to avoid tax, but you can reduce your taxable income by making a personal deductible contribution. For example, a $10,000 deductible contribution would be taxed at 15% inside the fund but could reduce your personal tax bill at your marginal rate—potentially saving thousands.

To claim this deduction, you must submit a valid Notice of Intent to your fund and receive acknowledgment before lodging your tax return.

Using Personal Contributions to Offset Tax Outside Super

If you’ve sold an asset personally and realised a capital gain, one tax-smart strategy is to make a personal deductible contribution to super. This won’t shelter the gain directly, but it will reduce your overall taxable income—helping offset CGT payable.

For example, if you make a $10,000 deductible contribution and you're on a 39% marginal tax rate, you could save $3,900 in tax. The contribution is taxed at 15% inside your fund, offering a more efficient vehicle for long-term growth.

To claim the deduction, you must:

• Submit a valid Notice of Intent to Claim to your super fund.

• Receive acknowledgement before lodging your tax return.

This approach can be especially useful in years when you’ve sold property or shares and want to mitigate the tax impact.

Key Points Recap

• Accumulation Phase CGT: 15% tax rate on gains, reduced to 10% after 12-month holding period.

• Pension Phase: CGT on gains is tax-free when the asset supports a retirement income stream.

• Timing: Strategic sale timing—especially around 12-month marks or pension entry—can reduce or eliminate tax.

• Contributions Strategy: Deductible contributions after a gain outside super can reduce taxable income and shift funds into a lower-tax environment.

Super isn’t just a retirement savings tool—it’s a tax-optimised environment that rewards long-term, strategic planning. Understanding how CGT works inside your fund can help you decide when to sell, how to contribute, and how to maximise what you keep. For Australians in their 30s to 50s, these choices now can compound into substantial tax-free growth later.

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial, tax, or investment advice. We recommend speaking with a qualified financial adviser before making any decisions regarding your superannuation. Every individual’s financial situation is unique, and personalised advice is essential to ensure the best outcome for your specific circumstances.