Jun 17, 2026 – 5.00amQ: I have $1.5 million in my self-managed super fund – $1 million is taxable, and $500,000 is tax-free. I want to “wash” the former from taxable to tax-free by using the recontribution strategy. I am 58. Are there any constraints to this strategy, such as the annual $120,000 contribution (or bring-forward three-year $360,000) cap? That is, if I withdraw $500,000 to wash and then recontribute, will the annual cap apply? Lastly, please confirm that the downsizer $300,000 contribution is not impacted by annual caps. JimA: While a so-called recontribution strategy can be useful to reduce the tax that will be paid by Jim’s beneficiaries after he dies, there are limitations, says Natalie Scott, SMSF manager at HLB Mann Judd Sydney.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
How to use home downsizing to scrub tax from your SMSF
This superannuation recontribution manoeuvre can reduce the tax bill faced by beneficiaries, but strict limits and caps apply before you execute the move.
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