The Ultimate SMSF EOFY Checklist: Mastering Compliance for Trustees in 2025

Estimated reading time: 10 minutes

Key Takeaways

• The EOFY checklist is critical for maintaining SMSF compliance.
• Meticulous documentation and meeting deadlines can prevent penalties and optimize financial positions.
• Increased ATO scrutiny emphasizes the need for accurate asset valuations.
• Trustees must stay informed about changing regulations, particularly with the upcoming Division 296 Tax.

Introduction

As June 30 approaches, Self-Managed Superannuation Fund (SMSF) trustees face a critical period demanding meticulous attention to detail and regulatory compliance. The EOFY checklist is a strategic tool helping trustees navigate the complexities of SMSF compliance efficiently and effectively. This systematic approach ensures all legal and financial obligations are met.

For SMSF trustees, the End of Financial Year (EOFY) is a pivotal milestone requiring thorough preparation to satisfy Australian Taxation Office (ATO) requirements and maintain the fund’s complying status.

An EOFY checklist provides trustees with a comprehensive framework for year-end responsibilities. A structured approach allows trustees to methodically address each compliance requirement, minimizing penalties and optimizing the fund’s financial position.

This guide equips SMSF trustees with the knowledge and tools to develop and implement an effective EOFY checklist ensuring total SMSF compliance and fulfilling trustee duties with confidence and precision.

Understanding SMSF Compliance

SMSF compliance means adhering to regulations and guidelines set by the Australian Taxation Office and superannuation laws. This is crucial for maintaining the fund’s tax concessions and avoiding penalties.

SMSF regulations are stringent to protect members’ retirement savings and ensure funds operate as intended. Compliance is mandatory and requires ongoing attention.

Key Compliance Areas for SMSF Trustees

• Documentation: Maintaining comprehensive records of all fund transactions, decisions, and activities.
• Market valuations: Ensuring all assets are valued according to ATO guidelines.
• Investment strategies: Reviewing and confirming alignment with the fund’s deed and members’ objectives.
• Pension payments: Verifying minimum requirements have been met.
• Contribution caps: Monitoring to prevent excess contributions.
• In-house asset rules: Confirming compliance with the 5% limit.

The ATO has intensified its compliance focus, particularly on investment strategies and asset valuations. This scrutiny is heightened by the upcoming Division 296 Tax from July 1, 2025, significantly changing SMSF taxation.

The Role of Trustee Duties

SMSF trustees have significant responsibilities, especially during EOFY. These duties encompass fiduciary obligations demanding the highest standards of care and diligence.

Primary Trustee Responsibilities

Key trustee duties include:

• Record maintenance: Keeping thorough, accurate records of all fund activities, decisions, and transactions.
• Investment oversight: Ensuring all investments comply with the fund’s strategy and trust deed.
• Asset verification: Conducting proper market valuations and confirming true ownership of all assets.
• Strategic review: Regularly evaluating the fund’s investment approach against members’ needs and objectives.
• Regulatory awareness: Staying informed about changes to superannuation laws and ATO requirements.

Trustees must act solely for the benefit of members’ retirement interests, prioritizing long-term financial security.

Consequences of Non-Compliance

• Administrative penalties.
• Loss of the fund’s complying status, potentially resulting in 45% tax on fund assets.
• Disqualification of trustees from managing superannuation funds.
• Legal action and potential criminal charges for serious breaches.

The ATO targets funds with poor compliance records, focusing on property valuations in preparation for Division 296 Tax implementation. Proper execution of trustee duties is crucial for maintaining compliance.

Crafting an Effective EOFY Checklist

A comprehensive EOFY checklist systematically addresses all compliance requirements before June 30. It serves as a planning and verification tool.

Steps to Create Your SMSF EOFY Checklist

1. Identify all applicable compliance areas for your fund’s specific circumstances.
2. Establish clear timelines for completing each task before the June 30 deadline.
3. Assign responsibility for each checklist item if multiple trustees are involved.
4. Include verification steps to confirm each task has been properly completed.
5. Update annually to reflect changing regulations and fund circumstances.

Essential EOFY Checklist Items

Documentation and Record-Keeping

• Compile all member statements and transaction records.
• Gather investment purchase/sale confirmations.
• Collate records of all asset movements with appropriate trustee minutes.
• Ensure all bank statements, property documents, and investment certificates are organized.
• Verify all transactions have been properly documented with supporting evidence.

Investment Strategy Review

• Evaluate current investment strategy against fund objectives.
• Document the review process with trustee minutes.
• Confirm all investments comply with both strategy and trust deed.
• Verify appropriate insurance arrangements for members are in place.
• Assess whether any changes are needed to accommodate shifting member needs.

Asset Valuation

• Arrange market valuations for all assets, particularly property and unlisted investments.
• Ensure collectibles comply with ATO rules implemented on July 1, 2016.
• Document valuation methods and evidence for each asset class.
• Schedule professional valuations where required (especially for properties).
• Record valuations in trustee minutes with supporting documentation.

In-House Asset Verification

• Calculate the percentage of in-house assets relative to total fund assets.
• Confirm all in-house assets remain below the 5% limit as of June 30.
• Verify no transactions during the year breached the threshold.
• If exceeding the limit, dispose of necessary assets before June 30.
• Document compliance with trustee minutes and supporting calculations.

A well-crafted EOFY checklist prevents oversight, streamlines the year-end process, documents trustee diligence, and reduces EOFY stress. By systematically working through each item, trustees can approach June 30 with confidence.

Ensuring Proper Pension Payments

Pension payment verification is critical for SMSFs with members in retirement. Failing to withdraw the minimum required pension amount by June 30 has severe tax consequences.

Critical Importance of Pension Compliance

Non-compliance can lead to the loss of Exempt Current Pension Income (ECPI), resulting in:

• Up to 15% tax on income generated from pension assets.
• Recalculation of tax for the entire financial year.
• Loss of tax exemptions on fund earnings.
• Additional administrative costs.

Minimum Pension Payment Requirements for 2024-2025

The minimum annual payment is calculated based on the member’s age and account balance as of July 1, 2024:

• Under 65: 4%
• 65-74: 5%
• 75-79: TBD