Segregation not allowed

SMSFs and small APRA funds will not be able to use the segregated method to determine their earnings tax exemption for an income year if:

• at a time during the income year, there is at least one superannuation interest in the fund that is in the retirement phase; and
• just before the start of the income year: – a person has a total superannuation balance that exceeds $1.6 million; and – the person is the retirement phase recipient of a superannuation income stream (whether or not the fund is the superannuation income stream provider for the superannuation income stream). 

• Under Subdivision 295-F, all complying superannuation funds including SMSFs and small APRA funds can use both the segregated and proportional methods to determine their earnings tax exemption on assets that are used to discharge liabilities in respect of current pension liabilities.