Impact on Retiree Investments of Capital Gains Tax Proposals

Thursday, May 28, 2026

The Australian Government’s proposed changes to Capital Gains Tax (CGT) are likely to have important implications for retirees, particularly those with investments held both inside and outside superannuation. While the final legislation is still being debated, the reforms signal a shift in how investment gains may be taxed from 1 July 2027 onward.

It is common for retirees to have a combination of superannuation pension accounts alongside personal investment plans, managed funds or share portfolios held outside super.

While the proposed legislation is still being finalised, the direction of the reforms suggests that the tax treatment of investment gains outside superannuation may become less favourable over time. For retirees, this could influence how investment income is managed, how portfolios are structured, and where future investments are held.

Currently, Australians who hold investments such as shares or managed funds for more than 12 months generally receive a 50% discount on capital gains tax when assets are sold. The proposed changes mean that instead of automatically receiving a 50% discount on capital gains after 12 months, tax would instead be calculated on the investment’s gain, after allowing for inflation.

Managed funds in investment portfolios can also create taxable capital gain distributions even when no investments are sold personally. This can sometimes come as a surprise to retirees who rely on these investments for income and stability. Under the proposed rules, these annual tax outcomes may become more significant depending on portfolio turnover and market performance.

By comparison, superannuation pension accounts are still expected to remain one of the most tax-effective environments for retirement savings. Many retirees currently pay little or no tax on investment earnings and realised gains within pension phase accounts. While recent government changes around large super balances (over 3mil) have attracted attention, most retirees are unlikely to be directly affected by these additional measures.

As a result, the balance between investments held inside super and those held personally may become even more important in retirement planning.

This does not necessarily mean major changes should be made immediately. In many cases, a well-diversified long-term investment strategy remains appropriate. However, the proposed CGT changes do highlight the importance of regularly reviewing how investments are structured and whether portfolios remain tax efficient over time.

For retirees with both superannuation pensions and external investment plans, several areas may be worth reviewing:

• Whether assets are held in the most appropriate ownership structure
• The tax impact of managed fund distributions
• Timing of asset sales and capital gains events
• Opportunities to utilise capital losses strategically
• Superannuation contribution opportunities where appropriate
• The balance between income generation, tax efficiency and long-term growth

Importantly, investment decisions should never be driven by tax considerations alone. Retirement planning also involves cashflow needs, estate planning, Centrelink considerations, risk tolerance and maintaining sufficient liquidity and flexibility.

Periods of legislative change can understandably create uncertainty for investors. However, they can also provide a valuable opportunity to review existing strategies and ensure portfolios remain aligned with long-term retirement objectives.

Professional guidance can be valuable in this process. Maher Digby Securities specialises in retirement investment planning, helping clients navigate the interaction between superannuation pensions and external investment portfolios. A tailored approach can assist retirees in understanding how proposed tax changes may affect their situation and whether any adjustments are appropriate.

For retirees, the key message is not to react hastily, but to remain informed, review strategies carefully, and continue focusing on a disciplined long-term investment approach. 

For more information, contact Mark Digby at Maher Digby Securities Pty Ltd – Financial Advisers (AFSL No. 230559).
This document contains general advice only and does not take into account your individual objectives, financial situation or needs. You should consider whether the information is appropriate for your circumstances before acting on it. While care has been taken in preparing this material, no representation or warranty, express or implied, is given as to its accuracy, reliability or completeness. To the maximum extent permitted by law, Maher Digby Securities Pty Ltd accepts no liability for any loss arising from reliance on this information, including opinions, forecasts or forward-looking statements. We recommend that you seek professional financial advice before making any investment or financial decisions