Understanding Capital Gains Tax Inside Your SMSF

Managing an SMSF means every investment decision has a tax impact, and capital gains are one of the most important areas trustees need to understand. Capital gains arise when an SMSF sells an asset for more than its cost base, with outcomes influenced by how long the asset is held, whether the fund is in accumulation or pension phase, and whether any exemptions apply. Poor timing, weak record keeping, or non-arm’s length transactions can significantly increase tax. This detailed guide on how capital gains work in an SMSF explains CGT calculations, discounts, ECPI exemptions, and common trustee mistakes in clear, practical language.