Opinion

SMSFs that do this check each year could end up paying less tax

To get optimal results, choose carefully which method your SMSF uses to calculate tax-free pension amounts.

Colin LewisContributor

Dec 5, 2024 – 5.00am

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The lodgement date for SMSF annual returns for 2024 is approaching so now is a good time to consider the methodology for calculating your fund’s exempt current pension income (ECPI).

This is the amount of fund earnings, including capital gains, that is exempt from tax if an SMSF is paying a retirement-phase pension. The ECPI must be determined and claimed in the SMSF’s annual return each year.

Colin Lewis is head of strategic advice at Fitzpatricks Private Wealth.