Resources for SMSF Trustees

As a trustee, it is vital you are on top of the rules and are supported with resources to assist you to manage your responsibilities and obligations as you navigate your self managed superannuation fund (SMSF) strategies and administrative requirements.

Common SMSF errors to avoid

If an SMSF fails to comply with legislation, an auditor can record a contravention and report this to the ATO. A fund that has contrived the law can be deemed ‘non-complying’. A non-complying fund will lose its complying status, and its tax concessions. In addition, trustees can be penalised.

Following are some of the most common errors the ATO encounters when auditing funds. We recommend you read this regularly to make sure you do not risk your funds tax concessions or ATO penalties.

Overdrawing the bank account

Overdrawing the funds bank account is a form of borrowing, which is not allowed.

Accessing benefits early

Benefits cannot be taken fom the fund until preservation age, and a condition of release are met.

Borrowing money from the fund

It is important to keep your personal funds and the SMSF’s funds separate so that you do not inadvertently draw money from the SMSF.

Exceeding contribution limits

Where contributions are made in excess of the limits.


If a contribution is made in late June and does not show on the SMSF bank statement until July it will not be recorded as a contribution for the year ending June, but rather the following year.

Pension payments

Where the minimum pension is not taken or more than the maximum (for a TRIS) is taken.

Name on investments

It is important to ensure that all investments by the fund are in the correct name format, which is very specific.

Use of Fund asset

Assets cannot be used by the members or their associates. This includes making loans to them. This applies even if the terms are commercial.

SMSF investment strategies in Australia

The ATO is increasingly focusing on SMSF investment strategies, and have detailed their expectations for trustees’ investment strategy processes and documentation.

As a trustee, one of your responsibilities is to manage the fund’s investments while ensuring that investment holdings align with the fund’s investment strategy. SMSF trustees are also required by law to document the investment strategy for the making and holding of investments.

At a minimum, the investment strategy must consider risk, return, liquidity, diversification, ability to discharge liabilities and insurance.

What’s involved in reviewing your investment strategy?

To ensure you meet your responsibilities and your fund remains compliant, we recommend you – in your capacity as a trustee – review your current investment strategy.  You need to confirm:

  • your strategy has been well thought out and is relevant for your circumstances; and
  • the documentation meets the requirements and enables your auditor to clearly see how the requirements have been met.

Your investment strategy should be reviewed annually, or more often if your circumstances change.

How can Bentleys help?

Preparing or reviewing an investment strategy is an important task for a trustee, and as such, we strongly recommend you seek professional advice from a licenced financial adviser. If you do not have a licensed financial adviser, we can refer you to one.

We acknowledge some trustees are quite comfortable undertaking tasks such as these themselves, and this is certainly an option.

Whether you use a financial adviser or complete the review yourself, Bentleys has tailored services that will meet your needs.

EOFY and your SMSF – what you need to do before June 30

The below list will guide you through the key issues you need to consider to ensure you are on top of the SMSF rules and opportunities.

Review Asset Values

Your SMSF requires all of the assets to be valued at market value at year-end.

If your SMSF holds property, either directly or indirectly via a private company or unit trust, trustees must consider if the last valuations are reasonable.  If there is any doubt you should obtain a valuation.  Additionally, if the last valuation was more than three years ago, an up-to-date valuation is required.

Importantly many of the strategies, rules and concessions are linked to an individual’s Total Super Balance (TSB) so obtaining up-to-date valuations may open up opportunities that some members felt were closed to them. Click here for details regarding TSB thresholds.

If the members are in retirement phase and drawing a pension, the minimum pension drawdown rates are linked to the year-end balances and if the fund values are not up to date, you are at risk of breaching the pension rules (which may impact the fund’s tax-free earnings proportions).

Check your investment strategy is up to date

As an SMSF trustee, one of your responsibilities is to formulate and implement an effective and proactive investment strategy for your fund.  Click here for guidance on how you can ensure your strategy is up to date

If your fund’s current investments are outside of the asset ranges highlighted in the strategy, it is important you acknowledge this in writing and document your intended action to address this (or update your strategy). We have created a webinar with tips to help.


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, rent relief provided to your SMSF’s tenant, or strategies regarding temporary imbalances to your investment strategy.

Don’t forget:

Ensuring the administration of your SMSF is up-to-date is also important, so:

  • check all your SMSF investments are held in the name of the trustee;
  • review your bank account for the year and make sure your SMSF has paid any SMSF related expenses;
  • double-check that your SMSF had not paid any personal expenses – correct these now if you discover any;
  • review your estate planning and binding death nominations and make sure they are still applicable.

We’ve prepared an SMSF checklist to help you to confirm that your administration and obligations are covered.


Review contribution strategies

Maximise tax deductible contributions (concessional contributions)

Making tax-deductible contributions can be a tax-effective way to build your superannuation. The concessional cap for the 2021 financial year is $25,000.

Concessional contributions include:

  • your employer’s superannuation contribution (the compulsory 9.5%);
  • any salary sacrificed contributions; and
  • any personal contributions you can claim as a tax deduction.

Ensure these are all taken into account when determining how much space you have left in your concessional cap.

Double-check your salary sacrifice arrangement’s timing so you know when your fund will receive amounts yet to be paid. Note, contributions are deemed to be made in the year the fund receives and processes them. Finally, check that your fund did not receive any of last financial year’s contributions in this financial year.

Personal super contributions

Most people (employees or self-employed) can make contributions to their super fund and claim a tax deduction in the current financial year.

To do this, you need to allow enough time to ensure your superannuation fund’s bank account has deposited and cleared the contribution by 30 June.

Important points to consider:

  • To claim a tax deduction – you will need to complete and lodge a Notice of Intent to Claim the Deduction and have this notice acknowledged (in writing) before the date you lodge your tax return, or the lodgement deadline date – whichever is earlier. The accepted ATO form is here. If the paperwork is not completed, you cannot claim the deduction!
  • If your income has dropped during the year, and you have already completed the paperwork to make a personal contribution, you can normally vary it before the due dates by completing the variation section in the ATO form.
  • Make sure your personal superannuation contributions don’t create a tax loss, as you will be unable to claim the deduction as a concessional contribution.
  • If you are aged between 67 and 75, you must have passed the work test to be able to contribute to super. The work test is met by working a minimum of 40 hours paid employment in a 30-day consecutive period during the financial year.

Consider after-tax (non-concessional) contributions

The general non-concessional cap (NCC) for the 2020 financial year is $100,000. Eligibility to utilise the cap can depend on your total superannuation balance (TSB). Details regarding TSB thresholds are below.

Members aged over 67 will need to meet the work test to make an NCC. The work test is met by working a minimum of 40 hours paid employment in a 30-day consecutive period during the financial year. (Note: laws to extend the age to 67 before the work test becomes relevant have been proposed – however at the time of writing, this is not in place for the 2020 financial year.)

If you are under 65 years of age at any time in the 2021 financial year, you may be able to bring forward three years of NCC, depending on your TSB. This enables up to $300,000 of NCC to be made in one year.

The bring-forward rule is automatically triggered if you make an NCC of more than $100,000 in one year. The total NCCs for the current year and for the next two years must be within the contribution cap of $300,000 total.

Check if you are able to make other contributions

Downsizer contributions

On 1 July 2018, a new type of personal contribution became available. Eligible members can contribute up to $300,000 to superannuation from the sale of their family home. This is regardless of TSB.

Members must be 65 years or older at the time of contribution and have owned the home for a minimum of ten years. The contract for the sale of the home must be after 1 July 2018. Furthermore, the proceeds need to be contributed to superannuation within 90 days of settlement.

This personal contribution will not impact concessional or NCC caps and is a once-only opportunity per member.

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.


Do you meet the relevant work tests, are under 71 years of age, have less than $1.6M in super, and earn less than $53,564?

If so, it is also worth considering if you can take advantage of the Government super co-contribution.

The co-contribution is a contribution to your superannuation fund from the government matching after-tax contributions made by a member at up to 50% with an upper government contribution limit of $500.

Spouse contribution

If your spouse earns less than $40,000 and you make a NCC superannuation contribution for them, you may be able to receive a tax offset of up to $540, depending on your spouse’s TSB.

Split your concessional contributions with your spouse

You can allocate up to 85% of your 2020 FY concessional contributions before 30 June to your spouse’s super if your spouse hasn’t met retirement age.  This is an effective way of building super for your spouse and managing your TSB.  Click here for details regarding TSB thresholds.

You will need to complete an election to enable one split per financial year using the ATO form.

Retirement planning actions

Have you met a condition of release to start drawing your super?

If you have met a condition of release during the year, consider whether commencing a pension could be beneficial. A condition of release includes reaching:

  • 65 years of age;
  • 60 years of age and retiring from a position of gainful employment;
  • 58 years of age and retiring from gainful employment with the intention of working no more than 10 hours per week in the future.

Note: there are also some rules that allow access for financial, health or compassionate grounds.

Draw your superannuation pensions

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. These pension payments must be cleared from your SMSF bank account by 30 June 2021.

Give yourself enough time for the payments to clear from your SMSF bank account. Failure to pay your minimum pension may result in your fund losing its tax-free income status on your pension balance.

As a response to COVID-19 the government announced a temporary reduction to the minimum drawdown rates by 50%.  If you have withdrawn more than your minimum pension this year, make sure you talk to your advisor and document how you wish the excess to be treated.

Manage your transfer balance cap

There is now a cap of $1.6 million on the amount you can have in tax-free pension phase when you retire.

Therefore, the end of the financial year is the perfect opportunity to consider strategies to ensure your’s and your spouse’s super balances are as even as possible so you can both maximise the $1.6m transfer balance cap (TBC) in retirement.

Contact us to determine the optimum strategy for amounts in excess of the cap.

Contact us

If you need help with your SMSF, speak to your Bentleys advisor or contact us here today to discuss your SMSF needs.

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.