Technically there aren’t many strategies that are genuinely unique to SMSFs – but there are plenty that are easier to implement in an SMSF. Given time is money, sometimes this can tip the balance between it being worthwhile to advise a client on a particular strategy vs not.
Many wealthier retirees have both pension and accumulation accounts in super. This is because the “transfer balance cap” prevents them from putting all their super into a pension.
There are tax benefits to having any payments they take out of the fund treated as follows:
And when a couple is involved – perhaps with several pensions – the hierarchy might be even more sophisticated.
This is really simple in an SMSF. Instructions are prepared at the start of the year and given to the fund’s accountant or administrator who looks after the rest.
Neither the adviser nor the member need to tell the accountant what to do each time a payment is made.
In a public fund, the member would need to take the money from different super accounts at different times to get this right – requiring much more vigilance. In an SMSF it’s all coming from one bank account.
Recontribution strategies can be a simple but invaluable strategy. They help clients:
The benefits and steps are the same whether the strategy is carried out in an SMSF or a public fund.
However, the fact that SMSFs involve sharing all the investments and cash between all of a couple’s super accounts can make this far simpler to do in an SMSF. (We talk more about this shared investment approach in our article).
For example, let’s imagine Jane and Perry are currently receiving pensions from their super. They both want to:
In an SMSF, they could do this with only $360,000 in cash (rather than $720,000). They would essentially follow the above steps for each of them separately – both using the same $360,000 in cash.
Even better, remember that when they each contribute the $360,000 back into super, it simply returns to the same (SMSF) bank account and can be converted immediately to a pension. There is no need for a new account.
Strategies that are unique to SMSFs
Deferred allocation or double deductions
this is a strategy sometimes used by SMSF members to claim two years’ worth of tax deductions for their personal contributions in the same year.
For example, Jane is 60, retired and sold an investment property in August 2025 for a large capital gain. She’d like to make a large personal contribution during 2025/26 and claim a personal tax deduction for it – that would mean she pays less tax on her capital gain.
Normally, the maximum amount Jane can contribute and claim as a tax deduction is the “concessional contributions cap” – which is $30,000 in 2025/26. We'll assume the same cap is going to apply in 2026/27.
Jane already has $1m in super. This is relevant because it means she can’t use some special “catch up” rules that might have allowed her to use any of her concessional contribution caps that she hasn’t used in the previous financial year.
However, if Jane has an SMSF she can do the following:
The full $60,000 will be deductible to Jane in 2025/26 because that is the year in which both were received by the fund
However, the second $30,000 won’t count towards Jane’s 2025/26 concessional contributions cap. It will count towards her cap in 2026/27 – the year in which that contribution was allocated to her account.
She can’t do this in a public fund because they have to allocate contributions to members’ accounts within 3 days of receiving them. But an SMSF has a longer timeframe – the 28th day of the following month. So as long as the second contribution is made in June 2026, the allocation can be delayed until the following financial year.
(There is some important documentation to do – but Heffron can do that for you.)
When any super fund starts a “retirement phase pension” (generally a pension for someone who has retired or turned 65), it gets a special tax break. It stops paying income tax on some or all of its investment income (rent, interest, dividends, distributions from managed funds and even capital gains). Income that is exempt from tax like this is known as “exempt current pension income” or ECPI.
In a public fund, ECPI is just all the income earned by the investments in a pension account. So if a member asks their fund to sell a particular investment, it really matters whether it’s owned in a pension account or accumulation account.
Sometimes that's good. If a member starts a pension, moves some of the super fund investments across to the new pension account and then sells all of them, then all of the capital gain will be exempt from tax.
But sometimes it can be a problem – what if the member wants to sell assets owned in their accumulation account? There will be capital gains tax to pay.
In an SMSF ECPI usually works differently. For example, if 40% of an SMSF relates to pension accounts, then 40% of the fund’s income is exempt from tax. That can be really useful as it means it doesn’t matter what gets sold, at least some of the capital gains will be exempt from tax.
It also gives SMSF members some unique opportunities that aren’t available in public funds.
For example, Mary’s SMSF sold a lot of investments in July and August because she felt the market had peaked and she wanted to lock in some of her large capital gains. Then in September, she started a pension with most of her fund.
At the end of the year, a proportion (let’s say it’s 80%) of her SMSF’s income over the whole year will be exempt from tax. This even includes the capital gains she made in July and August. If she’d done exactly the same thing in a public fund, all of those gains would have been taxed.
Managing this tax treatment is one thing SMSFs are incredibly useful for. It can be particularly valuable when it comes to making large benefit payments – there are strategies around the timing of this that can make a significant difference to the tax outcome.