Preparing your SMSF for EOFY

Preparing your self-managed super fund for the end of financial year

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 the complexities involved and we are here to help you navigate this period efficiently.

In this article, we outline key reminders and considerations in preparing for EOFY, including a detailed checklist to help you keep track of the process.

Have you paid your minimum pension payments?

If your SMSF pays a pension, ensure you meet the minimum withdrawal requirements by 30 June 2024. If the minimum pension payment is not withdrawn before 30 June 2024, the fund may not be able to claim Exempt Current Pension Income, meaning the fund may have to pay up to 15 per cent tax on income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 2023 by the percentage applicable based on your age at 30 June 2023:

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 keep in mind that the COVID-19 relief measures announced by the government in March 2020 have now ended, and we have returned to the standard drawdown rates for the 2023/24 financial year. This means your minimum withdrawal required before 30 June 2024 will be substantially higher than in the previous four years. We recommend reviewing your transactions to date and consulting your BDO adviser to confirm the required amounts applicable to you.

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 2024 financial year remain the same as the 2023 financial year.

Type of Contribution	Cap
Concessional (pre-tax)	$27,500
Non-Concessional (after-tax)	$110,000

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 2024. This year, as 30 June falls on a weekend, all transactions should be processed prior to Friday, 28 June. 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.

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.

Important updates from FY24

SMSF trustees should be aware of regulatory updates and changes in the industry. Most recently, the bill to impose an additional tax on superannuation balances above $3 million was recommended to proceed with no changes. This levy is set to take effect from 1 July 2025 (subject to the Bill making its passage through both houses before 30 June 2024). You can find out more about this bill and what it means for you in our recent Super Alert.

Our regular superannuation insights detail other considerations and reminders to help you stay on track. Trustees should also consider these recent reminders and updates in the lead-up to 30 June.

Valuing SMSF assets for your annual return

In late March, the Australian Taxation Office (ATO) released a reminder for trustees of SMSFs about the importance of accurately valuing assets at market value each year to meet valuation requirements.

In the article released on 25 March, trustees are reminded that:

Failure 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 as requested by the auditor.

End of year SMSF audit considerations and estate planning guidelines

Understanding the complexities of the SMSF audit process is paramount to ensure your fund is compliant. In the wake of recent high-profile cases, we anticipate SMSF auditors may now require additional independent evidence of the existence of SMSF assets and their relevant value at the end of each financial year.

In this article from November 2023, we detail the key considerations to assist the auditor and avoid delays in an annual audit, as well as estate planning guidance and requirements.

Navigating tax concessions and the pitfalls of non-arm's length income

An essential aspect of the Australian superannuation system is its provision of various taxation concessions designed to encourage individuals to save for retirement. However, these concessions come with restrictions, such as the inability to access these retirement savings without meeting strict conditions.

As a result, from a taxation standpoint, individuals with the capacity and willingness to do so may aim to maximise their superannuation savings. This can be achieved through:

Maximising the income derived by their superannuation fund, or
Minimising the fund’s expenses.

Find out more about the importance of managing non-arm’s length income in this recent article.

Get Your Detailed Checklist

For a thorough guide on preparing your SMSF for the end of the financial year, download our 2024 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.

Download the checklist

How BDO can help

Superannuation is a complex area and implementing the right actions and strategies before 30 June 2024 is vital to ensure your superannuation savings are maximised. Our superannuation team has a great track record of successful outcomes, including engagement with the ATO in compliance issues or rectifying overdue lodgements.

If you require any assistance, contact your local BDO adviser for assistance and ensure your savings are working for you.

Disclaimer:

This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such.

The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read.

The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without

obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.

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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and forms part of the international BDO network of independent member firms.

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