Preparing your self-managed super fund for the end of financial year
Preparing your self-managed super fund for the end of financial year
This article was originally published May 2024.
Short on time? Read the key takeaways.
As the end of the financial year (EOFY) approaches, it is crucial to ensure your self-managed superannuation fund (SMSF) is in order. We understand this can be a complex process and we’re here to help you manage this period efficiently.
In this article, we outline key reminders and considerations to help you prepare for EOFY, along with a detailed checklist to keep you organised and on track.
Have you paid your minimum pension payments?
If your SMSF pays a pension, you must withdraw the minimum amount by 30 June 2025. If the minimum pension payment is not withdrawn before 30 June 2025, the fund may not be able to claim Exempt Current Pension Income, meaning the fund may have to pay up to 15 per cent tax on income generated from pension assets. This oversight could prove to be a costly error.
Your minimum pension is calculated by multiplying your pension account balance as of 30 June 2025 by the percentage applicable based on your age at 30 June 2025:
|
Age |
Standard Minimum % Withdrawal |
|
Under 65 |
4% |
|
65-74 |
5% |
|
75-79 |
6% |
|
80-84 |
7% |
|
85-89 |
9% |
|
90-94 |
11% |
|
95 or more |
14% |
It is important to remember some banks need several days to process transactions. To avoid delays, we recommend making your pension withdrawals by 15 June 2025.
Have you optimised your contributions?
Check your concessional and non-concessional contributions to ensure they stay within the set caps. Exceeding these caps can result in additional tax obligations. The contribution caps for the 2025 financial year have increased, and are now as follows:
|
Type of Contribution |
Cap |
|
Concessional (pre-tax) |
$30,000 |
|
Non-Concessional (after-tax) |
$120,000 |
You may consider strategies such as contribution splitting with your spouse, claiming a spouse superannuation tax offset, or receiving a government co-contribution. These strategies can maximise your benefits but require meeting specific conditions.
Timing your contributions is critical, as all contributions must be in your SMSF's bank account by 30 June 2025. If you're planning any last-minute contributions, account for processing times and contact your BDO adviser if you need assistance with clarifying your contribution limits.
Have you reviewed your paperwork?
Now is a good time to make sure your super fund’s records are up to date and supported by documentation for all assets and transactions undertaken throughout the year. A complete set of records can save time and money when preparing your SMSF’s annual compliance work. Your accountant will typically require documents such as bank statements, investment purchases and sales contracts, current investment valuations, current lease agreements, rental statements, expense invoices and insurance policies.
Obtain up-to-date valuations for all investments
The Australian Taxation Office (ATO) continues to focus on SMSF investment valuations. In late March, the ATO reminded trustees of the importance of valuing assets at market value each year and highlighted the auditor’s role in ensuring these valuations meet all requirements.
The ATO noted that:
- Failing to meet valuation requirements may result in additional tax liabilities for the fund and its members, and trustees could face administrative penalties.
- During the annual audit process, trustees must provide their SMSF auditor with objective and supportable evidence for the valuation of fund assets, including providing all relevant documents requested.
Keep an eye out for our July edition of Super News where we will break down common myths about SMSF asset valuation requirements and clearly explain trustee obligations for obtaining market valuations.
Remember your investment strategy
Your SMSF’s investment strategy is your road map for choosing investments consistent with your objectives and retirement goals. It should set out why and how you have chosen to invest your retirement benefits to meet these goals. It is important to review this strategy regularly, and document it in writing.
Update your strategy if needed and consult your BDO adviser for personalised support.
Are you affected by the proposed Division 296 tax?
Although it’s clear that the Division 296 tax proposal targets individuals with total superannuation balances exceeding $3 million, it’s appropriate to think about its potential impact and whether any action is needed before the end of the financial year.
At this stage, we generally recommend no specific action be taken, as the measure is yet to become law and may ultimately operate differently to the original proposal. However, it is sensible to understand exactly how the new tax will operate, model various scenarios and obtain up-to-date valuations for all SMSF assets.
Get your detailed checklist
For a detailed guide on preparing your SMSF for the end of the financial year, download our 2025 EOFY SMSF Checklist here. Managing an SMSF involves a multitude of responsibilities, especially as the financial year draws to a close. This checklist provides step-by-step actions to help you stay compliant and optimise your SMSF.
How BDO can help
Superannuation is complex and implementing the right actions and strategies before 30 June 2025 is essential to maximise your superannuation savings. Our superannuation team has a strong track record of achieving successful outcomes, including resolving compliance issues and overdue lodgements through direct engagement with the ATO.
If you require any assistance, contact your local BDO adviser.
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