5 EOFY SMSF strategies that could save you thousands

Most SMSF trustees spend June chasing paperwork. The smartest ones spend it reducing tax.

The difference between the two approaches can be worth tens of thousands of dollars, sometimes more. Before 30 June arrives, here are five EOFY SMSF strategies that could help reduce tax and strengthen your retirement position.

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1. Your tax bill might be bigger than it needs to be

If you’ve sold an investment property, received a bonus or realised a capital gain this year, your tax bill is probably higher than usual. What most people don’t realise is that super can be used to bring it back down, sometimes significantly.

Here’s how it works. Most Australians are only using a fraction of their allowable super contributions each year. If you haven’t maxed out your concessional contributions in previous years, those unused caps don’t necessarily disappear. If your total super balance was below the relevant threshold at the previous 30 June, unused concessional cap amounts can generally be carried forward for up to five years and used in a single year.

For someone who hasn’t fully contributed since the 2021 financial year, that could mean a tax deduction of up to $167,500 in one year. SMSF members may also be able to stretch this further using a contribution reserving strategy, allowing a June contribution to be deducted in the current tax year while being allocated to the member in July and counted against the following year’s concessional contributions cap.

At a 47% marginal tax rate, the difference is real money back in your pocket.

This might apply to you if:

• You’ve sold an investment property or shares this year
• You’ve had a larger than normal income year
• You haven’t maximised your super contributions in recent years

Timing is everything here. Contributions need to be received and processed before 30 June, and that window is closing fast.

2. The after-tax move that quietly builds serious wealth

Not every powerful super strategy comes with an immediate tax deduction. Some of the biggest long-term gains come from simply getting more after-tax money into the super environment, where earnings are generally taxed at 15%, compared to your marginal rate of up to 47% outside it.

Over a decade or two, that difference compounds into something substantial.

If you’ve recently sold a home and you are aged 55 or over, you may be able to contribute up to $300,000 per person into super as a downsizer contribution, regardless of your super balance, and outside the normal contribution caps. For a couple, that could mean up to $600,000 combined.

If you have surplus cash sitting outside super earning investment returns that are fully taxed, it’s worth asking whether some of that belongs inside the fund instead.

This might apply to you if:

• You’ve recently sold or are planning to sell your home
• You have surplus savings sitting outside super
• You’re looking to accelerate your retirement savings in the years ahead
• You’re able to make non-concessional or downsizer contributions

3. Your adult children may be in for a tax surprise

After a lifetime of building wealth inside super, most people assume it passes cleanly to their family. It doesn’t always work that way.

Adult children who inherit superannuation can face tax of up to 17%, including Medicare levy, on the taxable component of what they receive. On a $500,000 super balance that’s mostly made up of employer and concessional contributions, that could mean a potential tax bill of $85,000.

There are strategies that can reduce this significantly by gradually shifting the balance from taxable to tax-free components. Done over time, this can save families tens of thousands of dollars. But careful planning for super withdrawals and considered contribution timing is key.

EOFY is also the right moment to check that binding death benefit nominations are current and that your enduring power of attorney reflects your actual wishes. An outdated nomination can send your super somewhere you didn’t intend.

This might apply to you if:

• Your super beneficiaries are adult children, not a spouse
• You haven’t reviewed your estate planning documents in the last few years
• Your super balance has grown significantly and is mostly from employer or concessional contributions

4. You might already qualify for tax-free retirement income and not know it

Most people assume they can’t access pension-phase benefits until they fully retire. That assumption costs some of them money every year.

The reality is that certain life events can trigger access earlier than expected. Being made redundant, ceasing one job while keeping another, reaching age 65, or meeting another condition of release can all potentially qualify you to start an account-based pension, even if you’re still working.

Once a retirement-phase pension starts, the investment earnings on assets supporting that pension are generally tax free. The pension payments themselves may also be tax free. That’s a meaningful shift from the 15% tax applying in accumulation phase, and a material shift from personal tax rates.

One example: someone made redundant at 62 who starts a pension on their $600,000 super balance immediately shifts those supporting earnings from taxed to tax free, even if they’re back at work within months.

This might apply to you if:

• You’re over age 60 and changed jobs, been made redundant or ceased an employment arrangement this year
• You’re between 60 and 64 and approaching retirement, or you’ve reached age 65
• You haven’t reviewed whether a condition of release has been met

5. Sometimes the smartest move is to wait for the new tax year

Not every EOFY opportunity is about acting before 30 June. Some of the best ones involve waiting until 1 July.

From 1 July, the concessional contributions cap rises from $30,000 to $32,500. The transfer balance cap, the amount you can move into tax-free pension phase, increases to $2.1 million. And the total super balance thresholds that determine who can make non-concessional contributions are also moving up.

For some people, that means strategies that aren’t available today become available on 1 July. Starting a pension now rather than waiting could permanently lock in a lower transfer balance cap. Making a non-concessional contribution before 30 June when your balance sits close to the threshold could close a door that opens again in July.

Before rushing to act, it’s worth a quick check: is waiting a few days actually the better move?

Worth considering if:

• Your super balance is close to a key threshold
• You’re planning to start an account-based pension soon
• You haven’t reviewed how the 1 July changes affect your specific situation

EOFY isn’t just a compliance deadline. It’s a planning moment.

Most SMSF trustees treat 30 June as the finish line. The most effective ones treat it as a decision point, a moment to reduce tax, strengthen their retirement position and set up the year ahead.

The closer you get to 30 June, the fewer options remain on the table.

If you’re not sure which of these strategies applies to your situation, now is the time to find out, not on 1 July when the window has already closed.

Contact our SMSF specialists to discuss your options before 30 June.