SMSF End of Financial Year Action Checklist

Any planned top up contributions must be received into the SMSF bank account by 30 June.

Should amounts be received by the fund on 1 or 2 July 2024, they are a contribution in respect of the 2025 financial year, and you will lose the ability to claim a tax deduction for the 2024 financial year.

The cap for the 2023/2024 financial year is $27,500.

Individuals aged 67 to 74 years (inclusive) are still required to meet the work test to make personal deductible contributions.

If claiming a tax deduction a “Notice of Intent to Claim a Tax Deduction for personal super contributions” must be completed and submitted to your super fund, and the trustees should acknowledge your request.

Catchup contributions could be utilised this financial year where the member had a total super balance on 30 June 2023 of less than $500,000.  Your accountant will be able to advise how much you have available as a catchup contribution.

Where a member’s total super balance on 30 June 2023 was less than $1,900,000, members are generally entitled to make a non-concessional contribution.

The NCC cap for 2023/2024 is $110,000 p.a and there continues to be no work test requirements (for members aged 67-75).

Members (up to age 75) may be entitled to the non-concessional cap bring forward rules. Up to 30 June 2023 this can be up to $360,000 over 3 years. 

However, proceed with caution here to ensure you are eligible or if your Total Super Balance is between $1,660,000 and $1,900,000:

It is a requirement that the minimum pension amount is paid each financial year.

Your minimum pension will differ each year depending on your age and account balance at 30 June in the prior year. Maintaining the minimum payment standards ensures that the pension does not cease, and pension account earnings are exempt from tax.

Don’t forget that 30 June falls on a Sunday this year so the minimum pension needs to be paid early to ensure that it clears the bank account in time.

Also the 50% reduction in annual pension payments to members allowed since COVID ceased on 30 June 2023, resulting in reverting back to normal rates next year.

Transition to Retirement Income Streams must keep within the minimum calculated pension and the 10% maximum.

These pensions do not enjoy tax exempt earnings until they enter the retirement phase, and they are not subject to the Transfer Balance Cap limits.

If you have a TRIS and you turn 65 during the financial year, your pension will automatically convert to the retirement phase. This means you will no longer be limited to the 10% maximum withdrawal restriction and also income generated from your account balance will become tax free earnings.

Investments held by a superannuation fund must be valued at market value each financial year. This is easy for shares and other listed investments, but property is a bit more difficult, every two years is a good rule of thumb, unless a significant event has occurred that has impacted its value in the interim.

If you have a commercial property that is rented by the members or a related party business it is essential that the SMSF is receiving rent at a commercial rate. No more and no less than commercial rates.

Trustees must formulate, regularly review and implement an investment strategy that has regard to the whole of the circumstances of the fund.

Now is a great time to review your current investment strategy to ensure the SMSFs investments are in line with the investment strategy. Where this is not the case, the strategy must be updated.

Changes in investments, members changing from accumulation to pension and economic changes all can lead to a change of investment strategy.

As part of your annual review, it is wise to ensure members have addressed their estate planning needs, including Wills, Enduring Powers of Attorney and Binding Death Benefit Nominations.

Death benefit nominations can now be made non-lapsing under SIS legislation, so they never expire unless revoked. For members who have had these in place for quite some time consider a review and potential update.

There have been significant changes to superannuation since 2007, which may or may not be expressly provided for in the fund’s deed. It is generally recommended trustees update the fund’s trust deed every 5 years, so it remains up to date and relevant to its members.

An up-to-date deed will provide greater flexibility for members and important strategic opportunities for the fund.