Preparing Your SMSF for the Financial Year’s End

 

As June approaches and the financial year draws to a close, it becomes increasingly vital for Self-Managed Superannuation Fund (SMSF) members to address year-end tasks promptly. Whether you are an SMSF trustee, investor, retiree, young professional, or part of a family managing an SMSF, ensuring your fund’s compliance and efficiency is paramount. Here’s a comprehensive guide to help you navigate the essential tasks and obligations as the financial year ends.

 

Understanding Your Total Super Balance (TSB)

Your Total Super Balance (TSB) plays a critical role in determining your eligibility for various superannuation rules and contributions. The TSB encompasses the total value of all your superannuation accounts, including SMSFs and any other super funds. Knowing your TSB is essential.

 

Contribution Considerations

Contributions Caps and Timing

Understanding the contribution caps is crucial to avoid excess contributions tax. The current caps for the financial year include:

  • Concessional Contributions Cap: $27,500 for this financial year. From 1 July 2024, the concessional contributions cap will be $30,000.
  • Non-Concessional Contributions Cap: $110,000 for this financial year, with the option to bring forward up to three years’ worth of contributions if eligible. From 1 July 2024, the non-concessional contributions cap will be $120,000.

Ensure your contributions are received by your SMSF before June 30th to count towards the current financial year.

Spouse Contributions

Making contributions to your spouse’s superannuation account can offer tax benefits. If your spouse’s income is below a certain threshold, you may be eligible for a tax offset.

Government Co-Contributions

Low-income earners might be eligible for government co-contributions. To benefit, ensure all your personal non-concessional contributions are made within the financial year.

Contribution Splitting

Contribution splitting allows you to transfer up to 85% of your concessional contributions to your spouse’s super fund. This strategy can be beneficial for retirement planning and managing your overall TSB.

 

Planning for Pension Payments

If you’re in the pension phase, it’s crucial to ensure you meet the minimum pension payment requirements for the financial year. Failing to withdraw the minimum amount can lead to unfavourable tax consequences.

Lump Sum Payments

For those considering lump sum payments, it’s essential to assess the impact on your TSB and any potential tax implications.

Investment Strategy Review

Review your SMSF’s investment strategy to ensure it aligns with your retirement goals and complies with regulatory requirements. Consider factors such as diversification, risk tolerance, and liquidity needs.

 

Rectifying Issues from the Previous Audit

Address any issues or non-compliance identified in the previous year’s audit. Common audit findings include:

  • Inadequate record-keeping.
  • Breaches of the investment strategy.
  • Non-compliant transactions or related party dealings.

Rectifying these issues promptly will help maintain the integrity of your SMSF and avoid potential penalties.

 

Maintaining Meticulous Record-Keeping

Keeping thorough and accurate records is crucial for SMSF compliance. Essential documents to maintain include:

  • Minutes of trustee meetings.
  • Financial statements.
  • Tax returns and statements.
  • Investment records and valuations.

Proper documentation ensures your SMSF meets the stringent standards set by auditors and regulatory authorities.

 

Proactive Fund Management

Being proactive in managing your SMSF involves staying updated with legislative changes and regulatory requirements. Key actions include:

  • Regularly reviewing and updating your fund’s trust deed.
  • Undertaking continuous education on SMSF management.
  • Engaging with professional advisers for expert guidance.

 

Conclusion

As the end of the financial year approaches, proactive and meticulous management of your SMSF is critical. By understanding your Total Super Balance, optimising contributions, planning for pension payments, rectifying audit issues, and maintaining comprehensive records, you can ensure your SMSF’s compliance and efficiency.

Don’t leave your SMSF tasks until the last minute. Start preparing now to enjoy a smooth transition into the new financial year, and safeguard your retirement savings effectively.

 

Need expert assistance with your SMSF? If you’re ready to take the next step in your financial journey, consider reaching out to a qualified financial adviser today, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.

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