Hi Andy, I don't know how you would do this with the Smart Editor, but it it possible with the standard editor widget. First ensure this behaviour is enabled in the Editor widget settings, then you should see the Cut (scissors) icon at the bottom of the Editor window (see screen shots). To use, select a polygon (can use the 'New selection' black arrowhead for this), click the Cut button, then either draw a line that passes right the way through your polygon to cut it, or, to make a donut hole, draw an internal line where the start and end of the line cross over. Hope that helps.
Cheers,
Andy.