Tax Changes for SMSFs

The following article is general information and not financial advice or recommendation to take any action. 

The proposed Division 296 tax changes in 2025, when legislated, will impact the landscape for self-managed super funds (SMSFs) dramatically.

The introduction of a new 30% tax on earnings for super balances above $3 million will apply not only to realised gains, but also to unrealised gains. This is prompting SMSF trustees to reconsider exposure to volatile, mark-to-market assets.

The challenge: Taxing unrealised gains

Under the new rules, a fund holding equities, property, or private investments could face a significant tax bill based on paper profits, without having actually sold the asset and received that profit.

This introduces a new layer of liquidity risk. Trustees may be forced to sell assets prematurely, or restructure portfolios, to meet their tax bill.

The response: Portfolio rebalancing

For SMSs with large allocations to growth assets, this could mean rethinking portfolio balances - potentially increasing exposure to deposits and income products, to help fund tax bills.

Furthermore, the predictable returns of income products may make it easier to manage tax liabilities and planning. Unlike equities or property, fixed income products are typically less prone to large swings in valuation, reducing exposure to the taxation of unrealised gains.

How Earnr supports SMSFs in this changing environment

At Earnr, we’ve designed products to balance yield and liquidity, and maintain low risk. These attributes may meet the evolving needs of SMSF trustees in the current SMSF climate.

• ‍Earnr Everyday Account: Monthly interest, with day-to-day access to funds.‍
• Earnr Notice Accounts (30 & 90 Days): Monthy interest, with higher rates for planning your cash flow needs. ‍
• Earnr Term Accounts: Our highest rates locked for the term, with interest paid monthy or at maturity.

Strategic considerations for Trustees

To navigate the new tax regime effectively, SMSF trustees are likely to:

• Reassess asset allocations, and reduce exposure to volatile or illiquid assets subject to mark-to-market taxation.
• Increase allocation to income-generating assets that produce reliable cash flow and help cover tax liabilities.
• Plan for liquidity to meet tax obligations without disrupting long-term investment goals.
• Seek professional advice to restructure portfolios and optimise tax outcomes.

The 2025 SMSF tax reforms are more than a policy change—they’re a strategic inflection point.

Earnr is here to help SMSFs adapt, offering trusted, high-yield savings solutions that appeal to the needs of long-term investors.

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‍The information in this article is intended to be factual though may also contain the opinion of the author. Whilst every effort has been made to ensure accuracy, we take no responsibility for any errors or omissions. Any opinions are those of the author alone and not a recommendation to take any action or obtain any product. You should consider whether this information is appropriate for you, and seek professional advice before making any decisions.

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