What works in Australia

Tactical asset allocation after tax in Australia: the rules of the Taxable account, Super, in plain words with sources, and what they cost 107 strategies over 2006 to 2026.

Version: 2.1
Published: 8 October 2026
Rules last checked: 22 October 2026

Individual (taxable) account

The 12-month discount rewards slow strategies; fast ones pay the full rate.

Tax cost a year (median): 2.4 pts
Median strategy, before / after tax: 9.4% / 7.0%
S&P 500 held, after tax: 10.1%
60/40 after tax (worst fall): 7.3% (-20%)

7 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 10 beat the S&P 500 held throughout. Returns a year, in AUD.

The rules

Net capital gains are added to income: 30% plus the 2% Medicare levy for taxable income of AUD 45,001 to 135,000 (2026-27).
Gains on assets held at least 12 months are halved (the CGT discount): 16% instead of 32%.
Capital losses reduce the undiscounted gains first and carry forward without limit, only against gains.
No mechanical wash-sale rule, but the ATO can cancel a loss from a sale and buy-back made for the tax benefit (TR 2008/1).
Distributions of US ETFs are taxed at 32%, with the 15% US withholding (W-8BEN) as a foreign income tax offset.
From 1 July 2027 the discount is replaced by inflation indexing of the cost and a 30% minimum tax on gains (Act No. 49 of 2026). With those rules, ignoring indexing, the cost rises from 2.4 to 2.9 points a year in our test.

Confidence in these rules: high. Checked 22 October 2026. Sources: ATO: Tax rates, Australian resident (2026-27 and 2025-26 tables); ATO: CGT discount; ATO: Using capital losses to reduce capital gains.

Superannuation, accumulation phase

A low flat rate on everything, inside.

Tax cost a year (median): 1.2 pts
Median strategy, before / after tax: 9.4% / 8.1%
S&P 500 held, after tax: 10.7%
60/40 after tax (worst fall): 8.0% (-19%)

7 of 107 strategies beat a 60/40 after tax in this account with a smaller worst fall; 18 beat the S&P 500 held throughout. Returns a year, in AUD.

The rules

The fund pays 15% on income and short-term gains, 10% on gains held 12 months (one-third discount).
Withdrawals after 60 are tax-free, and earnings in pension phase are not taxed at all.
Contribution caps 2026-27: AUD 32,500 concessional, AUD 130,000 non-concessional.
Most funds' direct investment options offer ASX-listed shares and ETFs only; ASX-listed funds exist for the main asset classes. A self-managed fund (SMSF) can hold more, within its investment strategy.

Confidence in these rules: medium. Checked 22 October 2026. Sources: ATO: CGT discount (complying super funds 33.33%); ATO: Contributions caps; ATO: Tax on super benefits.

Every strategy, account by account

Pro

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How this was computed, the limits, and every other country are in the full study.