Purpose: This study aimed to investigate the benefits of retaining harvest residues on the dynamics of soil C and N pools following clear-cut harvesting of a slash pine plantation in South East Queensland of subtropical Australia. Materials and methods: Immediately following clear-cut harvesting, macro-plots (10 × 10 m) were established on a section of the plantation in a randomised complete block design with four blocks and three treatments: (1) residue removal (RR0), (2) single level of residue retention (RR1) and (3) double level of residue retention (RR2). Soils were sampled at 0, 6, 12, 18 and 24 months following clear-cutting and analysed for total C and N, microbial biomass C (MBC) and N (MBN), hot water–extractable organic C (HWEOC), hot water–extractable organic N (HWEON), NH4+–N and NOx−–N. Results and discussion: The study showed that although soil total C decreased in the first 12 months following clear-cutting, harvest residue retention increased soil total C and N by 45% (p < 0.001) and 32% (p < 0.001), respectively, over the 12–24 months. NH4+–N, HWEOC, HWEON and MBC showed initial surges in the first 6 months irrespective of residue management, which declined after the 6th month. However, residue retention significantly increased HWEOC and HWEON over the 12–24 months (p < 0.001). Conclusions: This study demonstrated that harvest residue retention during the inter-rotation period can minimise large changes in C and nutrient pools, and can even increase soil C and nutrient pools for the next plantation rotation.