BDO's Super Quarterly Update | December 2024

Welcome to BDO’s Superannuation Quarterly Update for the December 2024 quarter. Here, we provide the latest news and insights from Australia’s ever-changing superannuation and self-managed superannuation fund (SMSF) landscape. Keeping up to date with the latest developments and requirements is crucial to fulfilling your obligations and optimising your superannuation benefits.

In this update, we cover important announcements from the Australian Taxation Office (ATO), the flexibility that comes with using an SMSF to save for your retirement, upcoming lodgement dates, and a Q&A with Diana Wong, a Senior Manager in our Brisbane superannuation team.

What is the Regulator saying?

Don’t be tempted to dip into your SMSF for bills or presents this holiday season

While the holiday period can be a wonderful time of year, we all know it can stretch us financially. Despite this, the ATO has reminded SMSF trustees that unless they have met a condition of release, dipping into their SMSF to pay bills and buy gifts is not an option.

Generally, an SMSF member can only withdraw money from their SMSF bank accounts if they have met one of these conditions:

Reached preservation age and retired
Turned 65 years of age.

There are other limited circumstances when a member may access their retirement benefits, however the need for additional cash during the holiday season is not a valid reason.

If you have already taken money from your SMSF bank account and you don’t meet either of those conditions above, the ATO will consider this to be illegal early access, and you may be liable for additional tax, fines and penalties. Contact your BDO adviser immediately, and they will assist you to rectify the situation.

Did you know that you can vary your pay-as-you-go (PAYG) instalments?

The PAYG instalment system allows you to make tax prepayments during the year, which can help maintain a healthy cash flow and prevent a large tax bill at the end of the financial year.

If you think the fund’s PAYG instalments are either excessive or insufficient, the option for you to adjust them is available. These changes must be made before or on the day the fund’s instalment payment is due, and the new amount will apply to all remaining instalments unless another variation is made before the end of the financial year.

For more information about varying your instalments, visit the ATO website.

If you need help varying the PAYG instalment for your SMSF, contact your BDO adviser.

Get your SMSF assets valued

The ATO has again reminded SMSF trustees that they must ensure their fund assets are valued at market value.

The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction and must be based on objective and supportable data. For listed shares and trusts, the market value at year-end is easy to determine, while for unlisted shares, properties and other assets, input from a professional may be required.

One of the many responsibilities of an SMSF trustee is to obtain a market value for each asset in their SMSF every year, and these market values are then used to determine the member balances at year-end (30 June).

Your auditor will check that assets have been valued correctly and assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.

Your BDO adviser can assist you to determine what type of valuation your SMSF assets require. Contact us today if you need assistance.

Did you know?

When it comes to building your retirement savings, SMSFs offer a level of control that traditional super funds simply can’t match.

Did you know that with an SMSF, you can decide exactly how your super is invested? Whether it’s shares, property, term deposits, or even more unusual assets like gold or cryptocurrency, the choice is yours. You must comply with the superannuation laws and regulations when making these decisions, but this level of flexibility means you get to save for your retirement in a way that makes sense to you, taking into account your own personal goals, risk appetite and values.

We must emphasise that with greater control comes greater responsibility. SMSF trustees must ensure their decisions comply with Australian regulations and serve the sole purpose of growing their retirement savings.

SMSF trustees must:

Ensure all investments comply with superannuation laws, including the sole purpose test, meaning all investments must solely benefit your retirement savings
Keep accurate records and reports for the ATO
Stay informed about regulatory changes and seek professional advice when needed.

Failing to meet these obligations can result in hefty penalties, so it’s essential to approach your SMSF management with diligence and care.

If you value having a say in how your super is invested and are prepared to take on the responsibilities of managing it, an SMSF may be the ideal option for you. It’s a powerful tool for those who want to align their retirement savings with their personal goals and preferences.

However, we must remember that SMSFs aren’t for everyone. Contact your BDO adviser to determine whether it’s the right choice for your circumstances.

Q & A with Diana Wong

Diana Wong is a senior manager in our superannuation team at BDO in Brisbane, and brings a wealth of expertise and dedication to her role. Known for her client-focused approach, she is passionate about supporting and educating her clients through their working lives and beyond, as she empowers them to plan for their futures. Paul Rafton, BDO’s national leader for superannuation, sat down with Diana for a Q&A session.

Diana, you have been working here at BDO for many years now. Do you remember what initially attracted you to join BDO and to specialise in superannuation?

I was initially drawn to BDO for its culture and values, and the firm’s strong focus on its people. From day one, I could see that BDO prioritised both professional and personal growth, and over the years, this has continued to resonate with me.

Superannuation stood out as a field where I could make a meaningful impact and help clients navigate complex rules and achieve their retirement goals. I enjoy building long-term relationships and seeing clients’ plans come to fruition.

In your role you see a lot of different SMSFs in your working week. What are some of the more common mistakes you see trustees making, and what can they do to avoid making these mistakes?

Some of the common mistakes I see SMSF trustees making often boil down to attention to detail and a lack of understanding of compliance requirements. These mistakes, while sometimes unintentional and avoidable, can have serious financial and legal implications.

For example, trustees sometimes transfer money into or out of their SMSF incorrectly, such as using SMSF funds for personal expenses or vice versa. Such transactions may breach superannuation laws or regulations, leading to penalties or administrative costs. To avoid this, we generally suggest maintaining strict separation between personal and SMSF accounts to help reduce the risk of errors.

Trustees may also inadvertently exceed their contribution caps from time-to-time, resulting in excess contributions tax or penalties. This often occurs when trustees make both concessional and non-concessional contributions without considering their personal limits, or aren’t taking into account employer contributions made on their behalf. To mitigate this, we generally advise consulting with their financial adviser or accountant prior to making contributions to ensure their contributions align with their personal limits.

Technology and the use of AI is becoming more prevalent in our day-to-day lives. Can you tell us a bit about how these digital tools can assist both trustees and their advisers in managing SMSFs?

Certainly, technology and AI are revolutionising the way SMSFs are managed by streamlining processes and enhancing decision-making.

For trustees, technology can simplify the management of their SMSFs and reduce the amount of information their accountant requires each year as their accountants are enabled access to bank feeds, registry access, etc.

For advisers, the use of technology and AI can streamline the process of not only preparing a set of financials and tax return, but also help analyse client data, identify potential compliance risks, and generate tailored advice.

Superannuation key lodgement dates

Deadline	Description
Payment of super guarantee contributions	28 days after each quarter ends e.g. SG contributions for the December 2024 quarter must be paid by 28 January 2025.
Lodgement of tax returns for newly established SMSFs	28 February 2025 (payment is also due on this date).
Lodgement of tax returns for SMSFs with income in excess of $2 million in the last income year lodged	31 March 2025 (payment is also due on this date).
Lodgement of all other SMSFs	15 May 2025 (payment is also due on this date).
Transfer Balance Account Reports (TBAR)	All SMSFs are now required to lodge TBARs on a quarterly basis, regardless of the member’s Total Super Balance. These reports are due 28 days after each quarter ends, e.g. the December 2024 quarter TBARs are due for lodgement on 28 January 2025.

Disclaimer

The information contained in this publication is purely factual in nature and does not take into account your personal objectives, financial situation or needs. It is provided as an information service only and does not constitute financial product or other professional advice and should not be relied upon as such. Before making any investment or financial decisions you should consider your particular objectives, and financial circumstance or needs. Where information relates to a particular financial product you should obtain and consider the relevant Product Disclosure Statement and obtain advice from a financial adviser before making any decision. If you do require financial advice, please contact the relevant BDO member firms in Australia who will be able to assist you in their capacity as an Australian Financial Services licensee. BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this publication nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded.

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