March 21, 2017

The Government has introduced a Capital Gains Tax (CGT) exemption in alignment with the super reforms legislation. The CGT exemption allows Trustees of super funds to capture the tax-free benefits of their assets to enable them to increase the cost base of those assets at 30 June 2017 without the requirement to sell their assets.

This has caused some concern for Trustees and members who are anxious about applying the exemption incorrectly.

This issue, more than any other aspect of the super reforms, is the one that has most people feeling anxious. Trustees and members are afraid that applying the exemption rules incorrectly will mean that they miss out on what could amount to a significant tax windfall.

It is important to note that the CGT exemption will only be available to a small number of superannuation funds and it has limited application. In particular, it applies to Trustees required to commute pensions in their fund so that they are compliant with the $1.6M transfer cap and also for members who are commuting their transition to retirement pension.

For eligible funds and members, it is prudent to take action now to determine whether the CGT exemption is an option for you, and if so, how it should be utilised.

For those who stand to benefit from the CGT exemption, there will be opportunity to reset the cost base of assets to a higher amount so that upon the sale of the assets, the tax is potentially reduced.

Also important to note is that reducing tax in eligible superannuation funds is a one-off opportunity.

The key is to understanding the exemption and apply it to re-set the cost bases of the correct assets. Failure to do so can potentially result in higher tax exposure.

There is no doubt that this is a complex matter that requires careful consideration. I invite you to contact BrentnallsNSW to determine firstly whether taking up the CGT exemption is appropriate for you, and secondly, to select the correct assets for the exemption.

If you have any questions about the CGT exemption, or any other aspects of the new super reforms, please contact BNSW Planning on (02) 8252 5555 or email

BNSW Planning Pty Limited, a wholly owned subsidiary of BrentnallsNSW Pty Ltd, holds a limited Australian Financial Services (AFS) licence and is fully compliant under 2016 legislation governing the delivery of super and SMSF advice by an accounting firm. For further information, please view our Financial Planning series of articles:

2016 brings regulatory changes to advice on super – What’s the buzz?
Don’t get caught out by super advice changes
BrentnallsNSW super solution

Related Links:
2017 Superannuation Reforms Video Presentation & Handout

The information and advice provided is general advice only. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Neither BNSW Planning Pty Ltd as Corporate Authorised Representative of Akambo Pty Ltd trading as Accountants Private Advice (AFSL 322056) nor its authorised representatives make any representation or warranty as to the accuracy, reliability or completeness of material in this site, or in sites linked to this site. Except to the extent that liability under any statute cannot be excluded, BNSW Planning Pty Ltd as Corporate Authorised Representative of Akambo Pty Ltd trading as Accountants Private Advice (AFSL 322056) nor its authorised representatives do not accept any liability (in contract, tort, negligence or otherwise) for any error or omissions in this material or for any loss or for any loss or damage (direct, indirect, consequential or otherwise) suffered by any person.