Super Newsletter
Superannuation - EOFY Checklist
As we approach the end of the financial year, it's time to review and address important matters to ensure financial health and compliance The following is a comprehensive checklist to guide you through the end of financial year preparations:
1. Have you made your superannuation Contributions?
Keeping in mind the annual concessional cap of $30,000 for individuals includes all employer and personal deductible contributions (see below for more detailed information). Where you wish to make voluntary contributions, the nonconcessional contribution cap is $120,000 but this is subject to Total Superannuation Balance Testing. If you are unsure about your eligibility or whether you are in a bring forward arrangement, please contact us to review your eligibility.
2. Have Pension Requirements been met?
Ensure minimum pensions are paid
Have you drawn more than your minimum pension and triggered further reporting?
If so, complete necessary documentation for benefit payments, including lump sum requests and ATO reporting where required
3. Asset Valuation and Documentation
With Division 296 looming, obtaining independent valuations of unlisted assets at 30 June 2025 is essential.
Ensure all assets held at the end of the financial year are valued or easily valued.
Verify ownership of all assets by the SMSF with thirdparty documentation (see below for detail on requirements).
4. Lease Management
Review leases to ensure they are up to date and appropriately documented
Don’t forget to also review leases for indexation or market increases
Where related party leases are due for renewal, a written rental appraisal should be obtained with comparable rental data analysis included therein, as confirmation for the audit
Related Party Transactions
Maintain all related party transactions on arm's length terms to ensure compliance
6. Audit Preparation
Organise audit visits for assets held custodially (i.e. artwork, precious metals and coins).
Resolve any issues raised in the audit management letter from FY24
Non-Concessional Contributions
For those under age 75, it is possible to make nonconcessional contributions of up to $120,000 for this financial year or use the bring forward of three years of contributions, to contribute $360,000. Remembering that those with balances over $1.9M are ineligible to contribute and if utilising the bring forward, the total super balance threshold is shaded in with full eligibility for those with balances under $1.66M (Note these thresholds are increasing at 1 July 2025)
7.
Fund Expenses Paid Personally
If any fund expenses have been paid personally, do you have the availability within your contribution caps to recognise these amounts as personal contributions? Or should a reimbursement be paid from the SMSF?
8. Unlisted Trust Investments
For SMSF investing in unlisted trusts, collect any outstanding unpaid present entitlements from the prior year
Contribution Caps
Have you maximised your contributions for the year?
Strategies for optimisation of contribution opportunities:
Contribution Splitting: Evaluate the option to split concessional contributions with your spouse to equalise your super balances. This is achieved where 85% of concessional contributions made in the prior year, can be transferred to your spouse. Contact us if you wish to use this strategy.
Co-Contribution Scheme: Individuals with low incomes may qualify for the government co-contribution of $500 by making personal non-concessional contributions. Ensure you meet the eligibility criteria and consider taking advantage of this scheme.
Spouse Contributions: You may be eligible for a tax offset of up to $540 per year by making a super contribution on behalf of your spouse (married or de facto) if their income is below $40,000 A contribution of $3,000 can be made as a non-concessional contribution to the low-income spouse's fund Eligible spouses, need to be under age 75 and have a total super balance of less than $1 9M
1 For those with total super balance < $1 9m
2 Only available for those with total super balances < $1 66m
3. Eligibility threshold increases to $2m at 1 July 2025
4. Eligibility threshold increases to $1.766m at 1 July 2025
If you have not yet utilised your concessional cap via Superannuation guarantee (SG) and other employer contributions, you have the option of making a personal contribution and claiming the amount as a deduction in your personal income tax return. Further deductions may be available if your total superannuation balance is under $500k and you have unused caps from prior years. Note that a work test applies for those over 67.
Legislated increase to Super Guarantee Rate
The Super Guarantee rate will increase from the current 11.5% to 12% on 1 July 2025. This will apply to the payment of salary and wages you make or receive from 1 July 2025.
Salary sacrifice arrangements may be impacted
It should be noted that the SG increase may impact salary sacrifice arrangements. Where you receive salary sacrifice contributions, please ensure that your current arrangement is reviewed to ensure that the concessional contribution cap of $30,000 for the financial year is not exceeded.
Valuation Requirements Unlisted Assets Including
Property
SMSF Trustees must satisfy the SIS Act requirement to value all assets at market value when preparing Financial Statements and your auditor must form an opinion as to whether the trustees have met their obligations With Division 296 looming (additional tax for those with balances above $3m) the ATO focus has increased on SMSF valuations and the auditors have responded accordingly, requiring rigorous support for valuations
Note that this requirement encompasses ALL assets, not just those with a ready market. Forming an opinion on market valuations for unlisted assets can be difficult and are considered high risk from an audit perspective. Sufficient appropriate audit evidence must be provided by SMSF trustees to verify the market valuation, including the method used for valuation and the data relied upon. The auditor cannot perform a valuation but is required to review the evidence provided to ensure that the market value used is appropriate.
We provide the following guide to assist you in obtaining the necessary evidence required to support the market value of various unlisted assets:
Unlisted Unit Trusts and Companies
The following information must be provided as evidence of ownership and value of shares and units in unlisted enities:
1 Financial statements for the unlisted unit trust/company for the relevant year PLUS
2 Valuation for the shares or units based on: Independent valuations of the underlying assets of the unit trust/company; or A unit/share price based on recent sales between unrelated parties; or For trusts and companies that are not closely held (i.e. more than 20 investors), a written verification of value provided by shareholder services, provided they are not a related party of the SMSF.
Where the trust or company has related party dealings, or inter-group loans, verification of arms-length terms should be provided for those transactions and further look-through to other entities may be required.
Loans to an Unrelated Trust or Company
The recoverability of the loan will have an influence on its market value Evidence to support the loan value will include: Whether repayments are being made in accordance with the loan agreement A copy of the most recent agreement should be provided.
A written verification may be requested from the borrower to confirm the value outstanding and current terms of the loan.
Details of any guarantees or value of assets held as security for the loan.
Real Property
Trustees should obtain verification of the value for properties at 30 June 2025.
Valuations should take the form of an independent appraisal/valuation report for the property. This can be performed by a real estate agent where the value is supported by comparable sales, or a report may be obtained from an independent valuer Online valuation services are also permitted
If the property is leased to a related party and a new lease term has commenced, support for rental market value should also be obtained A copy of the current lease should be provided
Collectables
An independent valuation report
Site visit by the auditor if the asset is a material asset of the fund (please confirm with our office if this is the case) Ensure that collectables are appropriately insured
Cryptocurrency
Online print out at 30 June 2025 of the SMSF's holding; Market value of cryptocurrency from reliable source at 30 June; and
Evidence that the wallet is held in the name of the fund.
For further assistance with market valuation obligations and gathering necessary information, please contact our office.
Division 296 Tax Update
Division 296 is the proposed tax measure that would impose an additional 15% tax on earnings attributable to superannuation balances exceeding $3 million. This tax is separate from existing taxes on superannuation funds and applies to earnings attributable to the portion of the member balance exceeding $3million This tax will be levied on the member not the super fund
As of May 2025, the legislation is not yet passed, but it is widely viewed as inevitable:
The government now likely only needs the support of the Greens in the Senate to pass the bill.
The SMSF Association, and other industry bodies have urged caution, advising trustees and advisers to hold off on implementing major changes until the final bill is passed.
The bill’s progress has been delayed multiple times due to concerns over:
Taxing unrealised gains
The unindexed $3 million threshold
Potential administrative complexity and fairness issue
We are monitoring the progress of this legislation closely and will provide an update once further information emerges.
Please contact our office if you have any concerns or would like to discuss this further
