Subject to strict legally enforceable rules and sanctions, a self-managed superannuation fund provides a facility that is assisted by tax concessions to accumulate wealth which is locked away for retirement or death.
There are tax concessions that apply in three main ways. A complying self-managed superannuation fund in the accumulation phase will pay tax on earnings at the special rate of 15%. Secondly, tax concessions are awarded to contributors in that they are entitled to limited tax deductions for their contributions. Contributors pay a flat 15% tax on contributions, although there are annual caps on how much money can be contributed in both pre-tax and post-tax dollars. Those contributors with an adjusted taxable income of $300,000.00 or more pay 30% tax on contributions. Thirdly, when the superannuation benefits are paid they are taxed concessionally or may even be tax free.