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As the end of the financial year (EOFY) approaches, it is crucial to ensure your Superannuation affairs are in order.

Below are a number of key matters that need to be considered.

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 If the minimum pension payment is not withdrawn before 30 June 2024, the fund may not be able to claim Exempt Current Pension Income, meaning the fund may have to pay up to 15 per cent tax on income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 as of 30 June 2023:

Keep in mind that the COVID-19 relief measures announced 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 Karen Dunnett at KBD Professional to confirm the required amounts applicable to you.

Optimizing 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.

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 make small increases to your Super Fund benefits but will require meeting specific conditions.

If your Superannuation balance is less than $500,000, you may be eligible to make tax deductible “Catch Up” contributions to your Super Fund, if you haven’t contributed the full allowable concessional contributions in the past 5 years.

Please consult with Karen Dunnett at KBD Professional to confirm your eligibility, together with the amounts available and the best way to utilise the catch-up contributions to your advantage.

The timing of your contributions is critical, as all contributions must be in your SMSF’s bank account by 30 June 2024. This year 30 June falls on a weekend, which means all transactions should be processed prior to Friday, 28 June to ensure your Superannuation fund receives your contribution on time. If you’re planning any last-minute contributions, you must account for processing times accordingly.

Please do not hesitate to contact Karen Dunnett at KBD Professional if you need assistance with clarifying your contribution limits.

Important updates from 2024 Financial year:
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 (per taxpayer) 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).

Note that for those that have more than one Superannuation Fund, the process of applying this will become more complex.

Valuing SMSF assets for your annual return
In late March, the ATO released a reminder for trustees of SMSFs about the importance of valuing assets at market value each year to meet valuation requirements.

• 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 ensuring 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.

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 utilising a raft of legal strategies.