EOFY 2025 And Your SMSF – What You Need To Do Before June 30
With the end of the financial year fast approaching, it is time to confirm your SMSF ‘housekeeping’ tasks are in order, and that you have considered your strategy opportunities.
In this article, we provide some tips and helpful examples to assist you with your EOFY preparations:
- Review contribution opportunities
- Withdrawing your superannuation – can you start a pension?
- Check your key SMSF obligations
- Upcoming changes from 1 July 2025
- Total Superannuation Balance (TSB) & key thresholds
Want to know more about how Bentleys can help you? Contact us today. We’re here to help you get where you want to be.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.
Review contribution opportunities
There are a range of approaches that can assist with strengthening your superannuation, and potentially lowering your tax bill.
Making tax-deductible contributions can be an effective way to build your superannuation whilst potentially reducing your personal tax bill.
The concessional contribution cap is $30,000 and these contributions include:
- your employer’s superannuation contribution (the compulsory 11.5% and any salary sacrificed contributions);
- any personal contributions you claim as a tax deduction in your personal tax return.
| IMPORTANT TIPS |
|---|
| Ask your employer if they offer salary sacrifice. It can be a great way to grow your super tax-effectively and the contributions will be from your pre-tax pay. |
| Calculate the super contributions you have already made and will make before 30 June 2025, and include compulsory employer, salary sacrifice and personal deductible contributions. |
| Check the timing of your concessional contributions. They are deemed to be made in the year the fund receives and processes them. Don’t forget that 30 June 2025 is on a Monday! |
Most people (employees or self-employed) can make contributions to their super fund and claim a tax deduction in the current financial year.
What is the benefit of personal super contributions?
The contribution is taxed at 15% in super (or up to 30% if you earn $250,000 or more). Depending on your circumstances, this is potentially a lower rate than your marginal tax rate, which may be up to 47% (including the Medicare Levy) – this could save you up to 32%.
How?
- Complete and lodge with your super provider a Notice of Intent to Claim the Deduction Form.
- Your super fund will then provide a letter acknowledging the contribution can be claimed as a tax deduction in your personal tax return.
- You need the contribution acknowledgement letter before you lodge your tax return, or by the end of the financial year following the year you made the contribution – whichever is earlier.
- You need to allow enough time to ensure your superannuation fund has accepted and cleared the contribution by 30 June 2025. Super providers have cut-off dates for when it must be received by.
- If your income has dropped during the year, and you have already completed the paperwork to make a personal contribution, you can vary it before the due date by completing the variation section in the ATO form.
| IMPORTANT TIPS |
|---|
| If the paperwork is not completed, and acknowledgment letter from the super fund is not received, you cannot claim the deduction! |
| Make sure you have sufficient taxable income to claim the contribution in your personal return – you can’t create a personal tax loss. |
| If you are aged between 67 and 75, you must meet the work test during the financial year to be able to contribute to super. |
| Ensure you have the acknowledgment letter before rolling over your super to another fund or starting a pension otherwise you may not be able to claim the full super deduction. |
You may be able to contribute more concessional contributions if you didn’t maximise your contribution cap in the previous five financial years.
If your Total Superannuation Balance (TSB) was less than $500,000 (across all funds) on 30 June 2024, you can make catch up concessional contributions by using any unused concessional contribution caps from the previous five financial years. You can find this information on your MyGov log-in.
What is the benefit?
This might be useful if you pay income tax at more than 32.5% and are wanting to build your super, or have a spike in your income, such as having sold an asset this year and realised a capital gain.
| IMPORTANT TIPS |
|---|
| Timing is important. The contribution must be received before 30 June and retail super providers will have a cut-off date for these contributions to be received. |
| A Notice of Intent Form must be completed to confirm the amount you intend to claim as a deduction and submitted with your super provider. They will provide a letter acknowledging the contribution can be claimed as a tax deduction in your personal tax return. |
| Do your sums carefully to ensure accurate calculation of your unused concessional cap. |
| Example: Unused Concessional Contributions |
|---|
| Harry (47) and Abby (45) recently sold an investment property and had capital gains of $100K of additional taxable income this financial year. Harry and Abby both earn $190K per year and in previous financial years they haven’t always maximised their concessional contributions and their super balances are under $500K on 30 June 2024. |
| How? After checking their MyGov super details, Harry and Abby worked out their 5-year unused concessional contribution to be $50K and $30K respectively. Harry and Abby can make additional personal concessional super contributions before 30 June and claim them as a super deduction in their personal tax return. This will reduce the capital gains tax payable in their personal tax return. |
| Why? Harry reduced his taxable capital gains to nil and saved tax of $16,000, whilst Abby reduced her taxable capital gains to $20,000 and save tax of $9,600. |
Another way to invest more in your super is with after-tax income or savings, by making a personal non-concessional contribution. While these contributions don’t reduce your taxable income for the year, you can still benefit from the low tax rate of up to 15% that’s paid in super on investment earnings.
The non-concessional cap (NCC) is $120,000 and you can make these contributions up to age 74. Eligibility to utilise the cap can depend on your total superannuation balance (TSB) on 30 June 2024. Details regarding TSB thresholds are below.
You may be able to bring forward three financial years of NCC, depending on your TSB. This enables up to $360,000 of NCC to be made in one year. The bring-forward cap of $360,000 is automatically triggered if you make an NCC of more than $120,000 before 30 June 2025. Once triggered, your total non-concessional contributions over the next three financial years can’t exceed $360,000.
If you turned 75 during the 2025 financial year, you must have made your NCC within 28 days after your birthday month.
The rules are complex and implications wide and varied so please contact your Bentleys advisor to discuss.
If you are eligible to withdraw your superannuation, you may be able to fund your non-concessional contributions by a recontribution strategy.
| Example: Non-Concessional Contributions (funded by a super withdrawal) |
|---|
| In this example we also consider the estate planning benefits of a recontribution strategy and steps towards equalising member balances. |
| Ben (age 61) and Beth (age 61) have recently retired, and therefore are eligible to withdraw their super. Their super balances are $3M and $1M respectively. They have mostly made concessional contributions (employer and personal concessional) so their balances are mostly taxable component. They have independent adult children, and their wills state their super will go to their Estates, which will ultimately end up with their adult children. Ben and Beth might want to consider a non-concessional contribution being funded by a super withdrawal (recontribution strategy). |
| Why? Both Ben and Beth have super balances high in taxable components consisting of employer/personal concessional contributions plus earnings. When a taxable component is paid out to an independent adult child, they are taxed at 17% (includes 2% Medicare). When paid to an Estate and then to an independent adult child, they are taxed at 15% (no Medicare). Non-concessional contributions make up the tax-free component of the super balances. When a tax-free amount is paid to independent adult children it is taxed at 0%. |
| How? Ben could withdraw $480K from super and Beth recontributes it back to super as a non-concessional contribution by making $120K in June 2025 and then $360K in July 2025. |
| What else? Beth will have maximised her non-concessional contributions for four years. Ben will have moved some of his super balance to Beth to help maximise their transfer balance caps being the amount of super balance they can move to retirement pension where earnings are taxed at 0%. As Ben and Beth are only 61, they could do this strategy at least twice more until they are 75, as a strategy to equalise their member balances. |
| Tax outcome? On the $480K amount that was withdrawn and then recontributed back as a non-concessional contribution, Ben and Beth will have reduced possible tax paid by their adult children on their death by up to $72K. |
The Downsizer contribution enables eligible members to contribute up to $300,000 to superannuation from the sale of their family home. This is regardless of their TSB.
Members must be 55 years or older at the time of the contribution, have owned the home for a minimum of ten years, and the proceeds need to be contributed to superannuation within 90 days of settlement. The fund must also be provided with the ATO Downsizer form (at time of contribution or before).
This contribution is excluded from concessional or non-concessional caps and is a once-only opportunity per member. The contribution does add to the TSB, which may need to be considered for other planned strategies.
Note, the home does not have to be your family home at the time of sale. Also, it does not have to have been the family home for the entire ten years – increasing the pool of properties that may be eligible for the contribution.
| Example: Downsizer and Non-Concessional Contributions |
|---|
| Bernard (69) & Kate (70) recently sold their family home for $1.4M, they had lived in it for 15 years and the property was owned by Kate. Their super balances are $800K each. They want to increase their super balances for their retirement. |
| Bernard and Kate might want to consider: Each making a downsizer contribution of $300K from the sale of the family home. The sale proceeds from the family home can be used to contribute into super if the property was owned for more than 10 years. Bernard can still make this contribution as he is Kate’s spouse. |
| Timing is important! Contribute within 90 days of settlement and provide the signed ATO Downsizer form to the Fund at the time of, or before, the contribution is made. |
| Non-concessional contributions Bernard and Kate can use the 3 years bring forward non-concessional contribution cap of $360,000 each as well. In previous financial years, they had not been able to make non-concessional contributions due to the work test*. The work test no longer applies to non-concessional contributions, and these can be made any time prior to 28 day after the month they turn age 75, so long as their TSB is under the relevant thresholds. Bernard and Kate can put up to $660,000 each into super using the downsizer ($300K each) and the non-concessional contribution bring forward ($360K each). Before they make the contribution, they have checked their total super balance on 30 June 2024 that are below the relevant threshold for the $360,000 non-concessional contribution. |
| *Work Test: The work test is met by working a minimum of 40 hours paid gainful employment in a 30-day consecutive period at any time during the financial year. |
If your spouse is not working or earns a low income, you may want to consider making an after-tax contribution into their super account. This strategy could potentially benefit you both: your spouse’s super account gets a boost and you may qualify for a tax offset of up to $540.
You may be able to get the full offset if you contribute $3,000 and your spouse earns $37,000 or less pa (including their assessable income, reportable fringe benefits and reportable employer super contributions). Your spouse must be under 75 when the contribution is made to be eligible, and have a TSB under $1.9m.
A lower tax offset may be available if you contribute less than $3,000, or your spouse earns between $37,000 and $40,000 pa.
You can allocate up to 85% of your 2024 FY concessional contributions before 30 June 2025 to your spouse’s super if your spouse is under preservation age or between preservation age and age 65 and not retired.
This is an effective way of building super for your spouse and managing your TSB, which is relevant for the strategies outlined below.
You will need to check with your fund that it offers contribution splitting and find out their process. It usually involves an election to enable one split per financial year using the ATO form.
| Example: Spouse Splitting |
|---|
| Matt (54) and Sally (50) super balances are $1.9M and $600K respectively. Matt is contributing up to the concessional cap of $30K each financial year. Sally is a consultant and sometimes makes contributions. Matt could consider splitting his concessional contribution to Sally each year to equalise their super balances. |
| Why? There are limits on the amount of super you can use to start an account-based pension where earnings are taxed at 0%. From 1 July 2025, this will be indexed to $2M. Matt splitting his concessional contributions will start to build up Sally’s member balance allowing them to have a higher amount in account-based pension when they retire. |
| How? Matt will complete a spouse splitting contribution form to instruct his super provider to split 85% of his concessional contribution. A new form will be required each financial year. |
If you are under 71, earn less than $60,400 in the 2025 financial year, and at least 10% of your income is from your job or a business, you may want to consider making an after-tax super contribution. If you do, the Government may make a ‘co-contribution’ of up to $500 into your super account.
The maximum co-contribution is available if you contribute $1,000 and earn $45,400 pa or less. You may receive a lower amount if you contribute less than $1,000 and/or earn between $45,401 and $60,400 pa.
Be aware that earnings include assessable income, reportable fringe benefits and reportable employer super contributions. Other conditions also apply – contact us if you need help.
Withdrawing your superannuation
If you are eligible to access your superannuation - it's important to understand the tax implications (and benefits) of drawing a pension.
Once you put money into your super fund, you won’t be able to access it until you reach preservation age and/or meet a ‘condition of release’.
You might have had a recent life event that means you can start an account-based pension. These events include:
- Reaching age 65
- Reaching age 60 and retiring from the workforce (you don’t intend to work longer than 10hrs per week)
- Ceasing a form of employment between age 60 to 64
| Example: Starting a Pension |
|---|
| Clive (age 62) has recently been made redundant, and his total super balance is $600,000. He doesn’t want to retire and has recently been able to secure a new job starting in 2 months. Clive can start an account-based pension on his balance at the time of his redundancy as he ceased a form of employment between ages 60 to 64. Abby (aged 61) has two employers, has recently stopped working for one of her employers, and her total super balance is $800,000. Abby can start an account-based pension on her super balance at the time of ceasing the employment arrangement as she has met a condition of release. |
| Why? The pension balances earnings will be taxed at 0% and the pension income will be tax-free and not included in their taxable income. |
| What Else? If they don’t need the pension income, they might consider recontributing this back to super by way of concessional contributions or additional non-concessional contributions. They won’t have access to these contributions until they meet a new condition of release (most likely retirement or age 65). |
If you are in pension/retirement phase, you need to ensure the minimum pension has been paid to you in cash for this financial year.
Current pension minimum percentages for 2025 FY are as follows:
| Age | Percentage Factor |
|---|---|
| Under 65 | 4% |
| 65-74 | 5% |
| 75-79 | 6% |
| 80-84 | 7% |
| 85-89 | 9% |
| 90-94 | 11% |
| 95 or more | 14% |
The minimum pension is calculated on your pension account closing balance at 30 June 2024, or the start balance if commenced mid-year. Contact your fund to ensure you have taken at least your minimum.
If you have a Transition to Retirement Income Stream that isn’t in retirement phase there is a maximum limit of 10%.
Your pension will stop on 1 July 2024 and be transferred to an accumulation account where earnings will be taxed at 15% (instead of the pension tax rate of 0%). You will need to start a new pension in the 2026 financial year to once again qualify for the tax-exempt status on income.
Your TRIS pension will stop on 1 July 2024 and be transferred to an accumulation account with all payments treated as illegal super withdrawals. This breach of the super rules can result in ATO penalties, and the fund being deemed non-complying.
If you are above age 67, you may be eligible for a CSHC. There has been increases to the income thresholds for CSHC to $99,025 per annum for single people and $158,440 per annum for couples. Benefit of the CSHC are cheaper medication and bulk billed doctor visits.
The income test for pensions is a deemed earning rate and not the actual pension withdrawal.
Check your key SMSF obligations
- Have you documented all your trustee decisions?
Ensure all SMSF documentation is in place to record decisions and actions taken during the year, such as lump sum withdrawals, or strategies regarding temporary imbalances to your investment strategy.
DON’T FORGET:
✔ Check your SMSF investments are held in the name of the trustee;
✔ Review the Fund’s investment strategy. For information on strategy requirements you can review our webinar HERE;
✔ Review your bank transactions for the year and make sure your SMSF has paid SMSF related expenses;
✔ Double-check that your SMSF had not paid any personal expenses – correct these now if you discover any;
✔ Check for any odd transactions for possible inadvertent early release amounts. There can be significant consequences for withdrawals prior to meeting a condition of release. You can review these in our article Early Access To Superannuation. What You Need To Be Aware Of;
✔ Review asset values are in line with ATO requirements. For more information, visit our article here: Warning On SMSF Asset Valuations;
✔ Review each member’s estate planning, binding death nominations and enduring power of attorney to ensure this documentation is still relevant. Contact your lawyer if you need to arrange or make amendments to these documents. Incapacity issues are an important structuring consideration for fund members. Please review this article – What Will Happen To My SMSF If I Lose Capacity? – and contact us with any queries.
We have prepared an SMSF checklist to help you to confirm that your administration and obligations are covered.
Upcoming Changes from 1 July 2025
There are some important upcoming changes to be aware of.
Make sure to consider this increase when planning your superannuation contributions for the coming year.
From 1 July 2025 the amount an individual can move to pension phase will increase from $1.9M to $2M (this is for individuals who haven’t started a pension before).
You may want to delay starting your account-based pension until the 1 July 2025 to receive the general transfer balance cap increase.
The total super balance will be increasing from $1.9M to $2M. Check your total super balance on 30 June 2025 as you might be able to make a non-concessional contribution again!
| Total Super Balance on 30 June 2025 | Bring Forward Cap |
|---|---|
| < $1.76M | $360,000 (3 years) |
| $1.76M to < $1.88M | $240,000 (2 years) |
| $1.88 to < $2M | $120,000 (1 year) |
| $2M and more | $Nil |
As at 3 June 2025, Division 296 tax legislation is returning to parliament after the recent election. While this Bill is not yet law, it is expected the legislation will most likely be passed. It is important not to panic as there is time to consider your circumstances and decide on an appropriate strategy to suit your overall best tax outcome.
Need help? Contact us today. We’re here to help you get where you want to be.
Total Superannuation Balance (TSB) & key thresholds
Many superannuation contribution strategies depend on your Total Superannuation Balance (TSB) at 30 June of the previous year. Below we provide details of some of the key thresholds.
Your TSB is a total of ALL superannuation balances held in ALL your superannuation funds.
Some of the key thresholds are:
| Threshold | Who is impacted |
|---|---|
| $500,000 | Impacts a member’s ability to utilise any unused catch-up concessional contributions. |
| $1,660,000 | Having a balance below this threshold allows a member (under 75 as at 1 July each year) to apply the three year bring forward rule for NCC.** |
| $1,780,000 | Having a balance below this threshold and above $1.66m allows a member (under 75 as at 1 July each year) to apply the two year bring forward rule for NCC.** |
| $1,900,000 | Having a balance below this threshold and above $1.78m allows a member to make up to $120,000 NCCs. At or above a balance of $1.9M, members are no longer eligible to make NCC, claim spouse contributions or be eligible for government co-contributions. |
| Transfer balance account reporting moved to quarterly for all SMSFs for transactions post 1 July 2023 | |
| **Contributions may be made up to 28 days following the end of the month where a member turns 75. | |
| Work Test: The work test is met by working a minimum of 40 hours paid gainful employment in a 30-day consecutive period at any time during the financial year. | |
| Condition of Release: A condition of release includes reaching: - 65 years of age. - 60 years of age and retiring from a position of gainful employment. - Ceasing a form of employment between ages of 60 and 64. Note: there are also some rules that allow access for financial, health or compassionate grounds. For more information, visit the ATO website. |
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Find an experienced SMSF advisor you can trust
Get in touch with Bentleys today to find out how our expert SMSF advisors can help you get where you want to be.
Access our comprehensive EOFY guide to step through the different opportunities, how they should be implemented to deliver the best outcomes for you, and to navigate the future tax cashflow consequences from adopting these strategies.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.
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