CGT in a Super Fund: How Gains Are Taxed in 2026-27

SMSF trustee reviewing fund asset sale records

A complying super fund pays tax of 15% on net capital gains in the accumulation phase. If the fund has held the asset for at least 12 months, a one-third discount applies, so the effective rate is 10%. Once the assets support a retirement-phase pension, those gains are generally tax-free. That is the core of capital gains tax (CGT) in super, and it applies to industry, retail and self-managed funds alike. The detail that trips people up is the switch between phases, so most of this article is about that.

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TL;DR

In accumulation, a super fund pays 15% on net capital gains, or an effective 10% on assets held 12 months or more (a one-third discount, not the 50% individuals get).
In retirement phase, earnings on assets supporting your pension, including capital gains, are generally exempt from tax, within your transfer balance cap.
The May 2026 federal budget left super’s CGT settings unchanged, while the individual discount outside super is set to change from 1 July 2027.
Division 296 adds tax on earnings for balances over $3 million, but it does not rewrite CGT for most members.
Moving assets in or out of super to dodge CGT usually costs more than it saves. Model both paths before you sell.

How capital gains are taxed inside super
CGT in the pension phase
The budget, Division 296 and “the new CGT”
Can you put money in super to avoid capital gains tax?
How much CGT on $300,000?
Mistakes that cost people money
Modelling CGT inside your own plan
Our perspective: CGT is a timing question, not a trap
FAQ
Sources

How capital gains are taxed inside super

A super fund is its own taxpayer. When it sells an asset such as shares, an ETF or an investment property for more than it cost, the net capital gain becomes part of the fund’s assessable income. The ATO’s guidance on how SMSFs are taxed lists net capital gains alongside contributions, interest, dividends and rent as the common types of assessable income. The same tax rules apply to a complying fund whatever its size or structure.

You do not pay this tax personally, and you do not declare the gain on your own return. The fund pays it from its assets, and your balance and returns reflect it. If you are in a large industry or retail fund, the tax is usually built into the unit price, so you rarely see a line item. In an SMSF, it shows up in the fund’s annual return.

The one-third discount

Individuals who hold an asset for more than 12 months get a 50% CGT discount. Super funds get a smaller one: a one-third discount for assets owned at least 12 months. The ATO states the effective rate on a discounted gain is 10%. The arithmetic is 15% applied to two-thirds of the gain.

A common mistake is to apply the individual 50% discount to a fund, which gives 7.5%. That figure is wrong for super.

A worked example

Say your accumulation-phase fund sells an ETF parcel and makes a $60,000 net capital gain.

Situation	Taxable gain	Tax at 15%	Effective rate
Held under 12 months	$60,000	$9,000	15%
Held 12 months or more	$40,000	$6,000	10%
Held 12 months or more, assets fully in retirement phase	Exempt	$0	0%

The difference between the second and third rows is why the phase your money is in matters more than almost any other CGT decision inside super.

Capital losses work as they do elsewhere: they offset capital gains, and net figures are what get taxed. A fund that realises a loss in the same year as a gain pays tax on the net result. Timing sales across a financial year is one of the few levers a fund trustee has, and it is easy to test in a model.

CGT in the pension phase

When your super supports an account-based pension, the fund’s earnings on those assets are generally tax-free. This is called exempt current pension income. The ATO page above confirms that retirement-phase earnings, capital gains included, are generally exempt. So the same ETF parcel that cost $6,000 in tax in accumulation can cost nothing in pension phase.

That also answers a frequent question about the tax on an account-based pension. Pension payments you receive and the fund’s investment earnings are separate matters. Earnings inside the fund are generally untaxed in retirement phase. What you pay on the payments themselves depends on your age and the components of your balance, so check the current rules for your situation.

The phase change is what counts

Moneysmart’s Financial decisions at retirement guide is a useful reference here. Reaching your preservation age, or even meeting a condition of release, does not by itself make your fund’s earnings tax-free. The tax-free treatment follows from moving money into a retirement-phase pension. Until then, the fund keeps paying 15% on earnings and the 10% effective rate on discounted gains.

If you are retiring before 60, our guide to super preservation age covers when you can access your money and what changes at each milestone.

The transfer balance cap limits the zero-tax pool

Only a limited amount can sit in retirement phase. The general transfer balance cap is $2.1 million from 1 July 2026, indexed in $100,000 steps. Anything above it stays in accumulation, where earnings and gains are taxed at the usual rates. If you have $2.6 million in super, for example, roughly $500,000 will likely remain in accumulation. Capital gains realised on that portion are taxed at 15% or an effective 10%.

Transfer balance cap splits super into two tax phases

It matters which assets you place where. A fund that holds high-growth assets with large unrealised gains might prefer to keep them inside the pension account if the cap allows. We walk through this in how to model transfers to protect your transfer balance cap. Asset placement within a split fund is a technical area, and an SMSF trustee should talk to a licensed adviser or accountant before restructuring.

Mixed funds

Many people hold both accumulation and pension accounts in the same fund, for example because their balance is above the cap or because they are still working. The fund generally taxes only the share of income that relates to the accumulation side. How that share is worked out depends on whether the fund segregates assets, and an SMSF’s accountant or actuary will usually determine it each year. If this is you, ask your accountant which method your fund uses, because it changes how much of a gain is taxed.

The budget, Division 296 and “the new CGT”

Two separate changes are being confused in search results and conversations.

The individual CGT discount outside super

In the 12 May 2026 federal budget, the government announced changes to the discount that applies outside super. ASFA’s response says that from 1 July 2027, CGT outside super will be the higher of a 30% rate or the investor’s marginal rate less an inflation-indexed discount. The same release says super investors, including SMSFs, are exempt from the change, and the current CGT settings for super remain.

So the answer to “will the new CGT affect superannuation?” is no, not in the way people fear. It does change the comparison between holding an asset personally and holding it in super, which is why it deserves a place in your planning. Our article on how the 2027 CGT reform changes investment tax for retirees and the one on locking in gains before 1 July 2027 go further on the outside-super side.

Division 296 tax

Division 296 is a different measure. From 1 July 2026, it reduces the tax concessions available to people with large super balances. The Treasury says the total concessional tax rate on earnings for balances between $3 million and $10 million will be 30%, and over $10 million will be 40%. The ATO describes it as an additional tax of 15% on the relevant earnings, and the ATO’s Division 296 page notes it can generally be paid from your super.

Two points matter for CGT:

The tax is aimed at realised earnings, so a gain generally matters when the fund actually sells the asset.
For SMSFs, the ATO describes a one-time election to reset the cost base of CGT assets to market value at 30 June 2026. It is irrevocable and applies to all the fund’s CGT assets, so it needs a considered decision, not a default tick.

If your balance is well under $3 million, Division 296 does not touch you, and neither does it change the core CGT rules above. Treasury’s media release describes the reforms as affecting a small share of members, so it is no reason for most people to restructure.

Can you put money in super to avoid capital gains tax?

Only in narrow cases. If you sell a personally held asset, you pay CGT as an individual. Contributing the proceeds into super afterwards does not undo that tax. The contribution just becomes a personal after-tax (non-concessional) contribution, and it counts toward your cap.

The exception is small business owners. Certain gains disregarded under the small business CGT concessions, such as the 15-year exemption or the retirement exemption, can be contributed under the CGT cap, which is $1,935,000 for 2026-27. You must give the fund a CGT cap election form before or when you contribute. Otherwise the fund treats it as a standard non-concessional contribution, and you may exceed your annual cap. The ATO page on caps, limits and tax on super contributions sets out the contribution rules. If you want to see how the annual limit interacts with a large contribution, see our guide to the non-concessional contributions cap.

A related and legitimate strategy is selling a non-super investment, paying the CGT, and using the net proceeds to build up super, because future gains inside super are taxed more lightly, and not at all in retirement phase. That trade-off depends on the size of the gain, your marginal rate, how long until you retire and your caps. It is worth modelling rather than guessing.

Can you put money in super to avoid capital gains tax? — overview diagram

The reverse move rarely works

People sometimes consider withdrawing from super to hold assets personally for flexibility. Moneysmart’s guidance indicates that the tax-free earnings in retirement phase often outweigh the flexibility of personal ownership, since assets held personally can trigger CGT at your marginal rate when sold. That is a good reason to check the tax cost of any withdrawal first.

How much CGT on $300,000?

There is no single answer, because it depends on whose name the asset is in and when it is sold. As a rough guide for a $300,000 net gain inside a fund, using the rates above:

Accumulation phase, held under 12 months: $45,000.
Accumulation phase, held 12 months or more: $30,000.
Retirement phase, within the cap: generally nil.

Outside super, the figure depends on your other income in that year, which sets your marginal rate, and on the discount rules in force when you sell. Because the outside-super regime is changing from 1 July 2027, a sale in 2026-27 and a sale later could land differently. That is the sort of question a side-by-side projection answers better than a rule of thumb.

Mistakes that cost people money

Applying the 50% discount to super. Funds get one-third, so the effective rate is 10%, not 7.5%.
Assuming preservation age equals tax-free. The tax exemption comes from starting a retirement-phase pension, not from a birthday.
Ignoring the cap. Money above the transfer balance cap stays in accumulation, so gains on that slice are still taxed.
Selling before the 12-month mark. In accumulation, a sale at 11 months costs 15% instead of 10%.
Treating contributions as a CGT escape. Without the small business conditions and the election form, a contribution is just a contribution.
Reacting to headlines. The budget change targets CGT outside super, and Division 296 is aimed at balances over $3 million.

Modelling CGT inside your own plan

A gain in a super fund is not a one-off event. It interacts with when you retire, when you start a pension, how much sits under the cap, and what your mortgage and investment property are doing at the same time. Spreadsheets handle one scenario at a time, and they tend to hide assumptions in cell formulas.

This is what we built AeroWealth for. You can project super, investment property, ETFs, mortgages and contributions in one plan, compare scenarios side by side, and stress-test the assumptions. The AI assistant explains the projections under Australian rules. Our free plan lets you start, and Pro is $7 per month, adding expanded scenario planning, bridge mode for early retirement, advanced mortgage features and a higher AI assistant quota. See the plans on our pricing page or start from the AeroWealth home page.

Our perspective: CGT is a timing question, not a trap

Most of the Australians we build for ask us how to pay less CGT. We think a better question is when each dollar should sit where. Super’s tax treatment is generous: 15% in accumulation, 10% on discounted gains, and nothing on earnings in retirement phase within the cap. Because of that, the biggest mistakes we see come from moving money in a hurry, for example selling an asset to “get ahead” of a headline, and paying tax that a calmer plan would have avoided.

The tax rules are not the hard part. The hard part is seeing how several decisions interact over 20 years: a sale this year, a pension start date, a contribution, an offset account, a bridge period before preservation age. A single number from a calculator cannot show that. Two scenarios next to each other can. We would rather you run the comparison, see what a decision does to your retirement age, income and net worth, and then take that evidence to your accountant or licensed adviser.

That last step is not a formality. Division 296 elections, CGT cap contributions and splitting an SMSF between phases all carry real consequences, and they depend on your facts.

— Aerowealth Team

FAQ

Is there CGT on assets in a super fund in pension phase?

Generally no. Earnings on assets supporting a retirement-phase pension, including capital gains, are generally exempt from tax in the fund. This is limited to the amount within your transfer balance cap, currently $2.1 million, and anything left in accumulation is taxed at the usual rates.

What is the CGT discount for a super fund?

A complying super fund gets a one-third discount on gains from assets held at least 12 months. Applied to the 15% rate, the effective tax on those gains in accumulation is 10%. This is smaller than the 50% discount individuals get outside super.

Will the new capital gains tax changes affect my super?

The changes announced in the May 2026 budget concern the discount for investors outside super, and ASFA reports that super investors are exempt. Division 296 is separate and applies only to people with balances over $3 million. Most members will see no change to how CGT works inside their fund.

Can I avoid CGT by contributing to super?

Not as a general rule. Selling an asset triggers CGT in your name, and contributing the proceeds afterwards is just a non-concessional contribution under your cap. Small business owners who qualify under the CGT concessions can use the CGT cap, but they must lodge the election with the fund first.

Do I pay tax on an account-based pension?

The fund’s earnings on the pension assets are generally tax-free in retirement phase. The tax on payments you receive depends on your age and the components of your balance, so confirm your position with the ATO or a tax professional.