As we approach the end of another financial year, it’s time to make sure your self-managed superannuation fund is ready for 30 June. We know that tax time is stressful enough, so we’ve covered some of the most important things to remember for your SMSF this end of financial year [EOFY].
additional super contributions
If you are looking to make additional super contributions before 30 June, we recommend this occurs before 23 June. This will ensure your super fund receives the contribution before the end of the financial year.
However, if you are making contributions via a payroll system please ensure that the contribution is made prior to 14 June 2023 as it takes longer to process and may not reach your fund until after 30 June 2023.
how much can I contribute to my super?
There are two caps that limit the amount you can contribute to super each year:
concessional contribution cap [the ones you get a deduction for]
- The general concessional contribution cap, which includes your employer contributions, salary sacrifice and personal concessional contributions is $27,500 for the 2023 financial year.
- If your total super balance on 30 June 2022 was less than $500,000, your personal concessional cap may be higher than this if you are eligible to make “catch-up” contributions. We recommend you speak to your advisor or accountant for information around your personalised concessional contribution cap.
non-concessional contribution cap [the after-tax ones]
- The non-concessional contribution cap is your after-tax contributions and is dependent on your total super balance.
- If your total super balance was less than $1.7 million at 30 June 2022 your cap will generally be $110,000. However, if you have triggered the bring forward in the prior two years, the amount you can contribute may differ.
- Alternatively, you may be able to utilise the ‘bring forward’ rule and contribute $330,000 this financial year, subject to your super balance being below predetermined thresholds.
- The rules around contribution eligibility are complex and every situation is different. Therefore, we recommend that you speak to your advisor before making any additional contributions.
what age can I contribute to my super?
For the 2023 financial year, providing you are making contributions within the above caps, you can contribute into your super fund up to age 75 for Employer concessional contributions and non-concessional contributions.
If you are wanting to make personal concessional contributions and are aged 67 to 75 you must still meet the ‘works test‘. This test requires you to have worked a minimum of 40hrs in a 30 day period prior to making the contribution to super.
ensure your pension minimum has been paid
If you are receiving a pension from your superannuation fund, it is important to ensure the minimum pension has been paid by 30 June 2023. We generally suggest to have the payment made by the middle of June to ensure it clears the bank account by the EOFY.
If you aren’t sure what your minimum pension is, please check with your SMSF administrator or your Financial Advisor.
special note – pension minimums
For the last few years we have had a 50% reduction in pension minimums. This ceases at 30 June 2023 and pension minimums will return to normal.
Age at 1 July Each Year Reduced Minimum [for 2022/23 FY] Standard Minimum [returning from 1 July 2023]
|Age at 1 July Each Year||Reduced Minimum [for 2022/23 FY]||Standard Minimum [returning from 1 July 2023]|
|95 and over||7%||14%|
review your investment strategy
Every superannuation fund must have an investment strategy documented. This is a good time of year to review this document and ensure the fund’s investments are still in line with this. If you have invested in a new asset class, commenced a pension, taken out insurance or changed your fund’s risk factor, you should look at updating this document.
property investment dealt with on market terms
If your superannuation fund holds property, make sure the following have all been considered:
- Check there is a current lease agreement in place, and it’s held on market terms
- Rent has been received by the super fund during the year in accordance with this lease agreement [including any CPI increases]
- The current market value of the property. With the property market having changed significantly during recent times, you should consider the impact this has had on your super fund property. You should obtain a current valuation or market appraisal. This can be provided by either a qualified independent valuer or a real estate agent, but it must include at least three market comparisons and explain the methodology of the valuation.
any issues from the prior year that need addressing
On completion of the annual audit, the auditor will issue an audit management letter to the fund. If there is anything that needs to be corrected, please make sure this is addressed before 30 June.
Common issues that we see are:
- Assets not being held in the name of the SMSF trustee
- Accidental payments made from the SMSF bank account
- Supporting documentation not being retained [e.g., Invoices for expenses]
- Unlisted investments – lack of supporting documentation regarding valuations.
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general advice disclaimer
Business Depot Financial Planning BNE Pty Ltd ABN 27 644 561 400 and its advisors are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL No. 357306.
The information provided on this website is a brief overview and does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.