The terms behind the architecture, in plain English.
SMSFs, trusts, contribution caps, franking credits — the language of high-income wealth, defined without the jargon. Each term links to where it shows up in a real plan.
What is an SMSF (self-managed super fund)?
A self-managed super fund (SMSF) is a super fund you run yourself as trustee, for up to six members — control over the investments in exchange for the compliance responsibility.
Family trust (discretionary trust)What is a family trust (discretionary trust)?
A family trust is a discretionary trust where a trustee holds assets for a group of beneficiaries and decides each year how to distribute the income — flexibility plus asset protection.
Division 293 taxWhat is Division 293 tax?
Division 293 tax is an extra 15% tax on before-tax super contributions for people whose income and contributions exceed $250,000 a year — lifting the tax on those contributions to 30%.
Concessional (before-tax) super contributionsWhat are concessional (before-tax) super contributions?
Concessional contributions are before-tax money going into super — employer SG, salary sacrifice and deductible personal contributions — taxed at 15%. The 2025–26 cap is $30,000 (ATO).
Transfer balance capWhat is the transfer balance cap?
The transfer balance cap is the lifetime limit on how much super you can move into a tax-free retirement pension. From 1 July 2025 the general cap is $2 million (ATO).
Franking credits (imputation credits)What are franking credits?
Franking credits are a tax credit attached to dividends from Australian companies that have already paid company tax — they stop the same profit being taxed twice, and can be refundable.
Testamentary trustWhat is a testamentary trust?
A testamentary trust is a trust created by your will that begins when you die — used to protect assets, control how wealth passes to the next generation, and access tax advantages for minors.
Bucket companyWhat is a bucket company?
A bucket company is a company set up to receive distributions from a discretionary trust, capping the tax on retained profits at the company rate instead of a high personal marginal rate.
Limited recourse borrowing arrangement (LRBA)What is a limited recourse borrowing arrangement (LRBA)?
A limited recourse borrowing arrangement (LRBA) is the only way an SMSF can borrow to invest — the fund buys a single asset held in a separate trust, with the lender’s recourse limited to that asset.
Capital gains tax (CGT) discountWhat is the capital gains tax (CGT) discount?
The CGT discount reduces the tax on a profit from selling an asset held more than 12 months — 50% for individuals and trusts, 33⅓% for complying super funds, and none for companies.
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