End of 2023FY SMSF Checklist

We’re quickly approaching the end of the financial year, and it’s essential to ensure that your SMSF is in order and that you’re maximizing the available strategies. To help you with this, we’ve compiled a checklist of the most critical issues that you should address with your advisers before the year-end including pensions, contributions, property and cryptocurrency. Please continue to read here:

1. Timing your contributions correctly: When making contributions, ensure that the funds reach your super fund’s bank account by the close of business on 30 June. Keep in mind that some clearing houses may hold onto the money before presenting it to the super fund. Additionally, pension payments should leave the account by the close of business unless paid by cheque, in which case the cheques must be presented within a few days of the EOFY. However, it’s recommended to use cheques as a last-minute preference.
2. Review your Concessional Contributions (CC) options: Take advantage of the opportunity to make concessional contributions without needing to meet a work test until the age of 67. Aim to maximize your contributions up to the CC cap of $27,500, but be careful not to exceed the limit unless you have unused carried forward concessional limits and a total super balance under $500K as of 1 July 2022. Remember to provide a notice of intent to claim a deduction for contributions.
3. Consider using the ‘Unused Carry Forward Concessional Contribution’ limits: Utilize the carry forward rule, allowing you to make additional CC in a financial year by utilizing unused CC cap amounts from up to five previous financial years. To be eligible, your total superannuation balance just before the start of that financial year must be less than $500,000 across all your super accounts. This rule has been in effect since 2018-19, meaning you can make up to $130,000 of CCs in a single financial year by utilizing unapplied unused CC caps since 1 July 2018. You can check your unused carried forward concessional limits via MyGov records. Remember that once your income exceeds $250,000, you will be subject to Div 293 Tax.
4. Review plans for Non-Concessional Contributions (NCC) options: With the changes to NCC contribution rules from 1 July 2022, the age limit of 75 applies to NCCs without meeting the work test. Consider making your tax components more tax-free by using recontribution strategies. SMSF members can cash out their existing super and re-contribute them (subject to contribution caps) back into the fund, reducing tax payable from any super death benefits left to non-tax dependants. Be aware of the changes to the Bring Forward Rule from 1 July 2023, affecting the maximum NCC cap based on your Total Super Balance (TSB).
5. Downsizer contributions: If you’re over 55 and have sold your home in the last year, check your eligibility for downsizer contributions of up to $300,000 per member. From 1 January 2023, the eligibility age to make downsizer contributions into superannuation has been reduced from 60 to 55 years of age. Downsizer contributions do not count towards non-concessional contribution caps.
6. Calculate co-contributions: Determine your eligibility for co-contributions, which can help boost your super. The amounts differ based on your income and personal super contributions.
7. Examine spouse contributions: If your spouse’s assessable income plus reportable fringe benefits is below certain thresholds, consider making a spouse contribution to their super. Check the ATO guidance for specific details. From 1 July 2022, you can implement this strategy up to age 75, and the spouse contribution is treated as a non-concessional contribution in their account.
8. Consider contributions splitting with your spouse: Splitting contributions with your spouse can be beneficial, especially in situations where there is a substantial income disparity or an age difference that allows you to get funds into pension phase earlier. Additionally, it can improve eligibility for concession cards or age pension by retaining funds in the younger spouse’s name. Keep in mind that any spouse contribution counts toward your spouse’s non-concessional contribution cap.
9. Ensure you meet your minimum pension requirements: The government has extended the temporary reduction in minimum pensions as part of the COVID-19 response. Make sure to take the new minimum pension, which is at least 50% of your age-based rate. If you have already taken pension payments equal to or greater than the 50% reduced minimum amount, you are not required to take further pension payments before 30 June 2023. For transition to retirement pensions, ensure you have not exceeded 10% of your opening account balance as pension payments this financial year.
10. Arrange market valuations of assets (attention to SMSF property owners): Regulations now require assets, including property and collectibles, to be valued at market value each year. Ensure you arrange for market valuations accordingly.
11. Arrange market valuation of the rent: If your SMSF property is rented to a related party, prepare a rental appraisal for the property rent.
12. Review Estate Planning and loss of mental capacity strategies: Review your Binding Death Benefit Nominations (BDBN) to ensure their validity and that the wording matches the requirements of the Trust Deed. Also, ensure you have appropriate Enduring Powers of Attorney (EPOA) in place to handle situations involving illness, mental incapacity, or death. Check your Trust Deed for any specific rules that may impact your estate planning, such as limitations on leaving money to stepchildren via a BDBN if their birth-parent has predeceased you.
13. Ensure you are ready for Quarterly TBAR Reporting: Starting from 1 July 2023, pensions or pension restructures cannot be done retrospectively. All SMSFs will be required to report quarterly, regardless of the member’s total super balance. Ensure that you report any events affecting the member’s transfer balance within 28 days after the end of the quarter in which the event occurs. Unreported events occurring before 30 September 2023 must be reported by 28 October 2023. Note that this reporting is separate from the SMSF annual return (SAR) for the 2022–23 income year.
14. Large one-off Personal income or gain – Bring forward Concessional Contributions: If you anticipate a large taxable income this year and expect a lower taxable income next year, consider a contribution allocation strategy to maximize deductions for the current financial year. This strategy is also known as an “Allocated Contributions Holding Account” or “Contributions Reserving” strategy.
15. Providing Proof of Crypto Currency Holdings as of 30 June: Ensure that you are using an exchange set up for SMSF accounts, providing Tax Reports that meet Australian audit requirements. Verify that the exchange account is in the name of the fund and the wallet is purchased using funds from the SMSF’s cash account. For annual audit purposes, take screenshots of the assets held in your Ledger wallet on 30 June 2023 and on the day you submit your paperwork, then email them to us at tax time.
16. . Reimburse to SMSF any SMSF expenses or taxes paid personally before 30 June.

We hope this checklist helps you prepare your SMSF for the end of the financial year. If you have any questions or need further assistance, please reach out to your advisers or contact our SMSF Specialist – Natalia Clack here.