The end of the financial year is fast approaching, and for those managing their Self-Managed Super Fund (SMSF), it’s essential to be well-prepared. The Commissioner of Taxation annual report 2022–23 noted that the proportion of SMSFs with contraventions reported by approved SMSF auditors compared to the total number of lodging SMSFs was 2.7% for the 2022-23 period, down by 0.1% from the period before[i].

Planning ahead can help streamline processes, maximise contributions, and ensure compliance with regulations, resulting in a lesser chance of a lodgement issue. Here are a few questions to ask yourself to help you navigate your SMSF through the EOFY successfully:

1. Do you need to make any additional super contributions?

If you’re considering making additional super contributions before 30 June, timing is crucial. To be counted in the current financial year, your super fund must receive the contribution by 30 June. To ensure your contribution is received on time, we recommend making these contributions before 14 June 2024, to allow for the processing of electronic fund transfers and BPAY, which can take days to appear in your super account.

2. Have you reached your contribution caps?

Understanding contribution caps is critical for effective super fund management. There are two key caps to consider:

Concessional contribution cap:

The general cap for concessional contributions, including employer contributions, salary sacrifice, and personal concessional contributions, is $27,500 for the 2023-24 financial year. If your super balance was under $500,000 at 30 June 2023, your personal cap might be higher, allowing for ‘catch up’ contributions.

Non-Concessional contribution cap:

This cap, based on after-tax contributions, varies depending on your total super balance. For balances under $1.9 million, the cap is generally $110,000. Keep in mind whether or not you have triggered the bring-forward rule in the last two years, as the amount you can contribute may differ.

In the 2023-24 financial year, individuals can contribute to their super fund up to the age of 75, within the specified caps. This includes employer concessional contributions and non-concessional contributions. For personal concessional contributions between the ages of 67 to 75, meeting the ‘work test’ is necessary, entailing a minimum of 40 hours of work in a continuous 30-day period during the financial year, before contributing to super.

Important to note: For the upcoming 2024/25 financial year, the contribution caps are set to increase, with the general concessional cap rising to $30,000 and the general non-concessional cap increasing to $120,000[ii]. It’s crucial to factor in these changes when planning your contributions before 30 June 2024. Consider delaying the trigger of the bring-forward rule for non-concessional contributions to leverage the enhanced caps in the future years.

3. Have you made your required minimum pension payments?

For those receiving a pension from your SMSF, ensure the minimum pension has been paid by 30 June 2024. We recommend making pension payments before 15 June 2024 to allow for clearance by EOFY, as underpayment can lead to compliance issues. The minimum percentage factor for certain pensions and annuities (indicative only) for each age group are as follows:

Age (as at 1 July) FY2023/2024
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-95 11%
95 or more 14%
Table 1: ATO (2024)

If you’ve already met the minimum amount and you require pension payments for living expenses, consider strategic withdrawals above the minimum as partial lump commutation sums, subject to advice from your accountant and adviser.

4. Is your investment strategy and recording up to date?

Every superannuation fund, including your own SMSF, must have a documented investment strategy. It is essential to review your SMSF’s investment strategy annually and to ensure that your fund’s investments still align with your documented strategy, especially if there have been recent changes, such as investment in new asset classes, any pensions commenced, whether insurance has been taken out, or a change in your fund’s risk factors[iii].

It is also important to make sure that all of the fund’s activities have been appropriately documented with minutes, and that all copies of all statements, valuations and schedules are on file for your accountant, administrator, and auditor.

5. Have you checked your estate planning and compliance obligations?

Review Binding Death Benefit Nominations (BDBNs) to ensure validity and alignment with the Trust Deed. Update Enduring Powers of Attorney (EPOAs) to designate a trustee in case of illness or mental incapacity[iv].

Stay compliant by meeting your Quarterly TBAR deadlines. Report events affecting a member’s transfer balance account within 28 days after the end of the quarter, regardless of the total super balance.

By asking yourself these questions, you should be able to start proactively managing your SMSF and navigating the EOFY with confidence and compliance. If you require personalised advice or assistance tailored to your specific financial situation, please consult with your adviser or accountant for expert guidance. Prepare your SMSF effectively for the end of the financial year to optimise your superannuation strategies and financial future.

If you would like to discuss EOFY tasks for your SMSF or your personal super contributions, contact our office today.

DISCLAIMER: All information on Focus Wealth Advisers is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider your personal circumstances and seek professional advice before making any decisions based on this information.

[i] Commission of Taxation annual report 2022-2023

[ii] ATO (2024) Making contributions to SMSFs

[iii] Business Depot (2024) Is your SMSF ready for EOFY?

[iv] Morningstar (2021) The ultimate EOFY checklist for SMSFs