BDO’s Super Quarterly Update

BDO’s Super Quarterly Update | March 2025

Welcome to BDO’s Superannuation Quarterly Update for the March 2025 quarter. Here, we will 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 will cover important announcements from the Australian Taxation Office (ATO), the looming deadline for SMSF annual returns, additional upcoming lodgement dates, and a Q&A with Simon Conolly, a Senior Manager in our Business Services team in Sydney.

What is the Regulator saying?

The ATO is the primary regulator in relation to SMSFs.

The SMSF sector continues to grow

The ATO has recently released their annual statistical overview of the SMSF sector. This overview provides the key statistics in relation to the SMSF sector for the 2022/2023 financial year, with the main source of data being the 2022/2023 lodged SMSF annual returns.

Key takeaways include:

As of 30 June 2024, there are over 625,000 registered SMSFs and this number is growing every year
SMSFs currently hold over $990 billion in assets, and this accounts for 25% of all superannuation assets in Australia;
The top five asset categories held by SMSFs are:
- Listed shares - 27%
- Cash and term deposits - 17%
- Unlisted trusts - 12%
- Non-residential real property - 10%
- Limited recourse borrowing arrangements (LRBA) - 6%
The estimated return on SMSF assets for the 2022/2023 financial year was 10.1%
There are more than 1.1 million SMSF members and the median age of these members is 63
70% of funds have a corporate trustee while 30% of SMSFs have individual trustees.

To read more about the annual statistics, visit the ATO website.

The transfer balance cap will be indexed on 1 July 2025

The general transfer balance cap (TBC) will be indexed on 1 July 2025, increasing by $100,000 from $1.9 million to $2 million. Similarly, the defined benefit income cap (DBIC) will rise from $118,750 to $125,000 for the 2025–26 income year.

This adjustment affects individuals with a personal TBC – if you have commenced a pension in the past, you will have a personal TBC. Individuals who have not yet reached or exceeded their cap will receive a proportional increase based on their unused cap space.

From 1 July 2025, individuals starting a pension for the first time will have a personal TBC of $2 million. If you would like to check your personal TBC details, these can be accessed through the ATO online services via your myGov account.

The indexation of the general TBC also impacts the total super balance (TSB), which in turn influences an individual’s non-concessional contributions cap, non-concessional bring-forward arrangement, and eligibility for the spouse tax offset and co-contributions.

If you would like to learn more about your personal TBC, contact your BDO adviser.

Asset valuations

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

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).

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.

The ATO has also reminded SMSF auditors about the role they play in ensuring that the valuations used for SMSF assets are current and supportable.

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. If your SMSF auditor is not able to verify the market value of an asset in your SMSF, they may be required to qualify their audit report, and lodge an auditor contravention report (ACR), if certain criteria are met.

The ATO has reported that they believe many trustees and auditors continue to rely on incorrect and outdated practices, including:

Obtaining a property valuation every three years
Not obtaining objective and supportable data for the assets held within unlisted unit trusts or companies.

As such, the ATO is currently focusing on SMSFs and the market valuations used, as well as SMSF auditors, so it’s essential that you get your market valuations correct and have all the necessary evidence to support them.

Your BDO adviser can assist you in determining what type of valuation your SMSF assets require to satisfy the ATO requirements. Contact us if you need assistance.

Did you know?

Did you know that the lodgement deadline for SMSF annual returns will be here in less than eight weeks? All SMSF annual returns are due for lodgement by 15 May 2025.

There are several consequences that may be incurred if you lodge your SMSF annual return late, including:

Removal of the fund’s regulation details from the Super Fund Lookup website
The application of failure to lodge penalties and additional ATO penalties, such as general interest charges

Our superannuation team have explored these consequences in detail. Read our article ‘Consequences of outstanding SMSF annual returns’ to learn more.

If you haven’t yet lodged the 2024 annual return for your SMSF, contact your BDO adviser to discuss next steps.

Q&A with Simon Conolly

Simon Conolly is a senior manager in our business services team in Sydney, and has extensive experience working with clients to maximise their retirement income. Paul Rafton, our national leader for superannuation, sat down with Simon for a Q&A session.

Simon, you are part of our business services team and superannuation is a bit of a passion project for you. Can you tell us how long you have been working in the superannuation industry and what draws you to this area of specialisation?

I have worked in the industry for nearly 25 years and what draws me to super is the complexity and dynamic nature, for example, there are frequent changes to legislation that require careful analysis to determine how those changes might impact a client’s current strategies and identifying whether such changes present new opportunities to clients is a challenge I enjoy a great deal.

Your day-to-day work here at BDO can be very varied, given your role in business services. Can you give us a bit of a rundown of the services you offer to BDO clients?

I’m responsible for the provision of comprehensive advice on complex strategic and technical matters to BDO’s high-net-worth clients and those of referring accountants. I’m fortunate to be part of a team that is able to facilitate the provision of advice on various disciplines, including superannuation, taxation, structuring, asset protection, succession planning and the delivery of accounting solutions for individuals and their private entities.   

There have been some big changes in the superannuation industry during the course of your career. Is there one change in particular that stands out to you as having the most impact?

It’s hard to go past the significant changes made to the superannuation system in July 2007. These changes included the removal of reasonable benefit limits and the removal of taxation on superannuation benefits for individuals over the age of 60 years, as well as significant changes to the contribution rules. A lot of work was required to balance our clients' desire to maximise superannuation balances with the new restrictions on superannuation contributions.

Superannuation key lodgement dates

Deadline	Description
Payment of super guarantee contributions	28 days after each quarter ends e.g. SG contributions for the March 2025 quarter must be paid by 28 April 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 SMSF’s 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 March 2025 quarter TBARs are due for lodgement on 28 April 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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