Planning is key as SMSFs enter new phase

Self-managed superannuation funds (SMSFs) have long been associated with older Australians and small business owners looking for greater control over their retirement savings.

But recent data suggests the sector is undergoing a quiet transformation.

Alongside tax reforms and persistent compliance challenges, younger people are slowly moving into the SMSF space. While 85 per cent of SMSF members are 45 years or older, there’s been significant growth in members aged between 25 and 34 years from just 2.4 per cent two years ago to around 10 per cent now.i

Almost 8,000 new SMSFs were established in the three months to the end of March 2025 with the number of new members increasing by 13,000. Australia’s SMSFs hold an estimated $1.02 trillion in assets with 26 per cent invested in listed shares and 16 per cent in cash and term deposits.ii

A new tax era

The new Division 296 super tax, due to apply from 1 July 2025, is aimed at those with total superannuation balances exceeding $3 million. An extra 15 per cent tax will apply to earnings on the portion of a member’s balance above $3 million, effectively lifting the tax rate on those earnings to 30 per cent.

What makes Division 296 particularly contentious is the inclusion of unrealised gains. For example, a share portfolio the SMSF holds has seen positive returns. Trustees may face tax liabilities on paper profits, even if assets haven’t been sold. This may cause issues for SMSFs holding illiquid assets such as property or farmland that has increased in value.

SMSF Australia and other industry bodies have raised concerns about fairness, complexity and the potential for unintended consequences.

Trustees with high balances should begin planning now before 30 June 2026, to consider asset rebalancing, contribution strategies and the timing of withdrawals. SMSF Australia recommends obtaining advice about your specific circumstances.iii

The advice gap

Despite the increasing complexity of SMSF regulation, the vast majority of trustees continue to operate without professional advice. While the number of SMSFs using financial advisers has grown to 155,000, up from 140,000 in 2023, some 483,000 are not using a financial adviser.iv

This could lead to costly mistakes, especially when navigating contribution caps, pension strategies or related-party transactions. SMSF Australia says that while there’s no legal requirement to obtain advice from a licensed financial planner, “unless you have the skills and expertise to do this yourself, it is certainly conventional wisdom to do so”.v

The compliance burden

Every SMSF must undergo an annual audit by an approved SMSF auditor. This includes verifying the fund’s financial statements and ensuring it is compliant with super laws. Trustees are also required to value all fund assets at market value as at 30 June each year, using objective and supportable data.

For property and other complex assets, valuations can be time-consuming and costly. The ATO recommends using qualified independent valuers when assets represent a significant portion of the fund or are difficult to assess. Auditors may request evidence such as comparable sales, agent appraisals or formal valuation reports.vi

Failure to maintain accurate records or provide sufficient documentation can result in audit delays, contraventions or penalties. Trustees must also ensure their investment strategy is regularly reviewed and documented, particularly when starting pensions or making significant contributions.

Looking ahead

As the SMSF sector evolves, trustees face a dual challenge: adapting to new tax rules and maintaining rigorous compliance. For those considering an SMSF – or already managing one – the message is clear. Getting financial advice can give you peace of mind when the rules are regularly changing.vii

With Division 296 to contend with and a younger demographic stepping in, the sector is poised for both growth and greater scrutiny.

Whether you’re a seasoned trustee or just starting out, now is the time to review your fund’s structure, seek expert guidance and ensure your paperwork is in order. The future of SMSFs may be more dynamic than ever, but it will also demand greater diligence.

Contact us if you have any questions.

i Highlights: SMSF quarterly statistical report March 2025 | Australian Taxation Office

ii Self Managed Superannuation Funds – SMSF quarterly statistical report March 2025 – Data.gov.au

iii Understanding Div296 I How will taxation of unrealised gains work

iv New SMSF trustees propel uptake of financial advice, but $1 trillion sector still has significant advice gaps | Vanguard Australia

v What are the rules for Financial Planners giving SMSF Advice? – SMSF Australia

vi SMSF administration and reporting | Australian Taxation Office

vii About SMSFs | Australian Taxation Office

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RBA Announcement – August 2025

At its latest meeting, the Reserve Bank Board announced it was lowering the cash rate from 3.85 per cent to 3.60 per cent.

Please click here to view the Statement by the Monetary Policy Board: Monetary Policy Decision.

With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.

You will be notified directly by your bank if and when they change their interest rate.

Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.

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Market movements and review video – August 2025

Stay up to date with what’s happened in the Australian economy and markets over the past month.

Interest rates and tariffs continue to influence markets globally.

After the RBA’s surprise move to leave rates on hold at its July meeting, soft inflation data has paved the way for a future rate cut.

The ASX 200 climbed to a fresh record high during the month of July. Wall Street also recorded all-time highs as tariffs begin to be locked in and AI investment takes off.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

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Market movements and review video – July 2025 

Stay up to date with what’s happened in the Australian economy and markets over the past month. 

Wars in Europe and the Middle East, volatile oil prices and shifting US policies are making headlines – but failing to dampen market optimism. 

The ASX closed the financial year with a near 10% return – its strongest since the COVID-19 crisis and despite US tariff threats. 

Despite tariff risks for the US economy, the S&P 500 index surged to a four-month high on hopes of future rate cuts and smooth trade negotiations. 

Click the video below to view our update. 
 
Please get in touch if you’d like assistance with your personal financial situation. 
 

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Get prepared to make tax-time easier

There are always lots of tax-related tasks to complete every EOFY, but as we move into the upcoming financial year, it is also worth getting to grips with new tax changes the Government’s election promises will usher in on 1 July, which we’ve outlined below.

New 2025-2026 tax changes

During the election campaign, the Labor government announced a number of tax changes.

These include the introduction of a standard $1,000 deduction for work-related expenses for taxpayers with labour income, a 20 per cent reduction in HECS-HELPS debts, and an extension of the $20,000 instant asset write-off until 30 June 2026.

Legislation has already been passed to cut the tax rate for individuals and is effective from 1 July 2026. The rate for income between $18,201 and $45,000 will be reduced from 16 per cent to 15 per cent, with a further reduction to 14 per cent in the following financial year.i

The government has also made it clear it intends to proceed with its draft legislation (Division 296) reducing the tax concessions for super accounts with a balance exceeding $3 million. This legislation will double the tax rate on earnings related to the portion of the balance over $3 million from 15 per cent to 30 per cent.

Now, let’s look at a few ways you can get prepared in the lead up to 30 June.

Start your tax preparations now

The ATO has announced its tax time hitlist, so it’s also important to check your current tax arrangements are not going to leave you vulnerable to an audit or significant penalties. The main focus for the ATO this year is work-related expense claims, investment properties and holiday home claims, and sharing economy income and cryptocurrency.i

With the ATO taking a much tougher stance on both tax reporting and payments, make sure you lodge and pay on time, or you could face penalties and interest charges. From 1 July 2025, interest paid to the ATO will no longer be tax-deductible.

Tips for businesses

Review and update all of your financial records and identify expenses that could be deductible.

You may want to make some deductible purchases prior to EOFY to help reduce your taxable income for the financial year. The small business instant asset write-off limit for 2024-25 is $20,000.ii

Also check your debtors, inventory and fixed assets, and ensure you write-off any debts that are not recoverable. Review any capital gains and losses and consider offsetting the gains with capital losses.

Check all required super contributions for employees have been made, plus any additional contributions for business owners. Ensure these contributions are received by the funds specified cut-off date to qualify for any tax deduction.iii

To-do list for personal tax

Getting your personal tax information prepared is also important, particularly given the ATO’s focus on personal deduction claims.

If you have regular deductible expenses (such as interest on investment loans and annual payments), consider prepaying them before 30 June so you can claim a deduction this financial year.

If you are likely to have personal capital gains tax obligations from the sale of assets, consider whether you should try to offset them against capital losses.

Time for some super contributions

Consider making extra personal super contributions before the financial year ends if you can.

Before making any contributions, check the total amount of both your concessional (before-tax) and non-concessional (after-tax) contributions across all your super accounts to ensure you do not exceed the annual cap limits.iv

Other super contributions to consider include personal tax-deductible contributions, contributions on behalf of your spouse and eligible contributions that could earn you a co-contribution from the government.v

If you would like to discuss EOFY preparations for either your personal tax or business, please call our office today.

i ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

ii Instant asset write-off for eligible businesses | Australian Taxation Office

iii Missed and late super guarantee payments | Australian Taxation Office

iv, v Caps, limits and tax on super contributions | Australian Taxation Office

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Tax update June 2025

ATO individual and business priorities

The Australian Tax Office will be cracking down on work-related expenses in personal tax returns this year after recently revealing some of the claims that have been submitted in the past.

The ATO is also reminding businesses of this year’s limit for the popular instant asset write-off and its ongoing focus on GST fraud.

Here’s a roundup of the latest tax news.

‘Wild’ deduction claims

The tax office caused some raised eyebrows with its revelations about ‘wild’ work-related expense claims made by some taxpayers, including a mechanic claiming an air fryer, TV, gaming console and microwave.i

Other claims deemed to be personal rather than work-related included a truck driver claiming swimwear so he could go for a swim when stopped for a break, and a fashion industry manager claiming over $10,000 in luxury-branded clothing that was purchased to wear to work functions.

This time the ATO says it intends to focus on common taxpayer errors, such as work-related expenses, working from home deductions, and income from multiple sources (including side hustles like ride sourcing services or selling services via an app).

Instant asset write-off limit

The ATO is reminding taxpayers who purchased business assets during the financial year that the instant asset write-off limit in 2024-25 is $20,000.ii

The instant write-off (which allows you to immediately deduct the business part of the cost of eligible assets) is available to businesses with an aggregate annual turnover of less than $10 million who use the simplified depreciation rules.iii

The full cost of eligible depreciating assets (both new and second-hand) costing less than $20,000 on a per asset basis, may qualify for the deduction.

Focus on business GST fraud continues

A Melbourne man has been sentenced to 2 years and 11 months’ imprisonment after obtaining over $390,000 in fraudulent GST refunds and attempting to obtain a further $330,000.

The sentence reflects the continued ATO focus on stamping out GST fraud, with the acting deputy commissioner Kath Anderson noting there were “no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds”.

The ATO-led Serious Financial Crime Taskforce remains on the lookout for potentially fraudulent GST activities, with information sharing identifying businesses using complex financial arrangements (such as false invoicing, misaligned GST accounting methods and claims for fake purchases) to obtain larger GST refunds.

New small business benchmarks released

Small business owners keen to take the ‘pulse’ of their business can now use updated financial benchmarks covering 100 different industries produced by the ATO.

Updated annually, the benchmarks are designed to help business owners compare their performance against other businesses in the same industry.

Owners can use the information to identify if their performance is within the normal range for their industry, which mean it is less likely to attract ATO attention.iv

Paperless SMSF reporting

The ATO has emailed trustees of SMSFs still completing and lodging paper activity statements encouraging them to move to paperless reporting for improved security and convenience.

The regulator says benefits of paperless reporting include an additional two weeks on the fund’s lodgment deadline, reduced errors, faster refunds and easier recordkeeping.

In line with the push for greater digital SMSF reporting, the ATO recently noted non-lodgment of SMSF annual returns remains a concern and this can result in trustee penalties and removal of a fund’s compliance status.v

Estimates of illegal early access in SMSFs is also worrying the regulator, with prohibited loans from funds increasing.

Help with compromised TFNs

With identity theft continuing to increase, the ATO has updated its information for taxpayers who find their tax file number (TFN) has been compromised.

TFNs can be comprised through a number of different channels like email or phishing scams, or through data breaches at legitimate organisations as well as ID theft by criminals.

Anyone who believes their TFN has been compromised or used illegally should contact the ATO immediately on 1800 467 033.

i ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

ii Instant asset write-off for eligible businesses | Australian Taxation Office

iii Simpler depreciation rules for small business | Australian Taxation Office

iv ATO releases new small business benchmarks for 100 industries | Australian Taxation Office

v Highlights from the 2025 SMSFA conference | Australian Taxation Office

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ATO watchlist for small business breaches

Pandemic-era leniency is a thing of the past and the regulator is warning small and medium enterprises (SMEs) it is keeping an eye on them.

Information is now published quarterly on the ATO’s SME focus areas webpage. The focus areas currently include – deductions and concessions, personal use of business income, operating outside the system and poor reporting habits.i

Business not personal income

Incorrect use of business money and assets is a perennial issue for the ATO, but it is reporting an increased use of business money and assets for personal purposes.

The ATO says the main area where SMEs are making errors relates to the integrity rules in Division 7A of the Income Tax Assessment Act. These rules apply when a private company attempts to provide money or other benefits to its shareholders or their associates tax-free.

According to the ATO, common errors in this area are caused by shareholders (both owners and associates) failing to understand the company is a separate legal entity and its money and assets do not belong to them and cannot be used for private purposes.

Failing to meet Division 7A requirements when making, repaying or managing loans to shareholders and associates is also attracting the ATO’s attention.

A private company making these types of loans must meet a number of requirements, including – entering into a complying loan agreement, charging interest at the benchmark interest rate, declaring the interest in the shareholders’ assessable income, and making repayments by 30 June (see Case Study).ii

Incorrect deductions and concessions

The ATO has also turned the spotlight onto those who incorrectly claim and offset business losses against other income sources.

Some taxpayers are claiming losses from a business activity (as either a sole trader or an individual in a partnership) where the activity is not related to their primary source of income.

Non-commercial business losses (NCL) cannot be offset against assessable income earnt from other activities in the year in which the losses are made.iii

Operating outside the tax system

Although taxi, limousine and ride-sourcing services have been on the ATO’s hitlist for some time, there is a continuing focus on businesses operating outside the tax system.

Operators in this area must register for GST regardless of their annual turnover and ensure they collect and pay GST and income tax on all rides and other business income.

The ATO is using a range of data sources to check that all drivers register for a Tax File Number (TFN), Australian Business Number (ABN) and the Goods and Services Tax (GST).

Drivers choosing not to register or comply with GST and income tax obligations may find the ATO itself registers them for GST and backdates their registration.

Contractor income and TPRS

The ATO is also checking on contractors who incorrectly report or omit contractor income.iv

The taxable payments reporting system (TPRS) now covers building and construction, courier, cleaning, IT, road freight and security services. These businesses must now lodge a taxable payments annual report covering contractor payments.v

Building good habits

The final area of current focus is changing small business GST reporting from quarterly to monthly.

From March 2025, those with a history of failing to comply with their reporting obligations will receive written communications from the ATO notifying them their reporting cycle has changed to monthly.

Targets of this action will be businesses who failed to respond to previous ATO communications and who have demonstrated a poor compliance history (such as paying late or the incorrect amount, failing to lodge or lodging late, and reporting their tax obligations incorrectly).

The shorter monthly reporting cycle change is designed to embed good business habits into the targeted business by better aligning reporting with their reconciliation process. According to the ATO, some SMEs have voluntarily moved to monthly GST reporting to improve cash flow management and keep their recordkeeping accurate.vi

Please give us a call if you are concerned about any of these issues so that we can help you decide on the best course of action.

i Small business focus areas | Australian Taxation Office

ii Loans by private companies | Australian Taxation Office

iii What is a non-commercial loss? | Australian Taxation Office

iv Contractors omitting income | Australian Taxation Office

v Taxable payments annual report (TPAR) | Australian Taxation Office

vi Good business habits | Australian Taxation Office

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Market movements and review video – May 2025

Stay up to date with what’s happened in the Australian economy and markets over the past month.

The month of April was marked by economic uncertainty and global trade tensions that drove market declines and volatility.

These events are anticipated to influence the RBA’s cash rate decisions, as will the recent decline in core inflation to within the target range.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

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Federal Budget 2025-26: Spotlight on tax

In the shadow of an upcoming election, Jim Chalmers’ fourth Budget delivered small but unexpected tax cuts for all Australian taxpayers.

The modest cuts were delivered against a backdrop of growing economic uncertainty, with the treasurer emphasising the need for national resilience in the face of rapid global change.

Tax cuts for everyone

In a surprise revelation, the treasurer announced two new tax cuts in the 2025 Budget.

The first is a cut in the lowest personal income tax rate, which covers every dollar of a taxpayer’s income between $18,201 and $45,000. The current 16 per cent rate will reduce to 15 per cent in 2026-27 and be lowered again to 14 per cent from 1 July 2027.

According to the government, the reduction will take the first tax rate down to its lowest level in more than half a century. Combined with the 2024 tax cuts, an average earner will be paying $2,190 less in 2027-28 compared with 2023-24.

The second tax cut is an increase of 4.7 per cent to the Medicare low-income threshold for singles and families. This means the Medicare Levy will not kick in until singles earn $27,222, rather than the current $26,000 level. The threshold for families will rise from $43,846 to $45,907, while single seniors and pensioners will have their threshold increase from $41,089 to $43,020.

Energy relief for small business and households

The Budget also provided small businesses and households with a welcome additional energy bill rebate to cope with the burden of high energy costs.

Around one million eligible small businesses will receive an additional $150 directly off their energy bills from 1 July 2025. This will extend the government’s energy bill relief until the end of 2025, as the previous rebate scheme was due to end on 30 June.

Abolition of non-compete clauses and licensing reform

Some businesses may be less pleased with the Budget announcement of a planned ban on non-compete clauses covering low- and middle-income employees leaving for another business or to start their own.

Competition law will be tightened to prevent businesses making arrangements that cap workers’ pay and conditions without their knowledge or agreement, or that block them from being hired by competitors. The government claims this will increase affected employees’ wages by up to 4 per cent as they will be able to move to more productive, higher-paying jobs.

Work will also begin on a national occupational licence for electrical trades, which is intended to provide a template for other industries where employees are currently restricted from working across state and territory borders.

Beer excise freeze

Government support for the hospitality sector and alcohol producers was also announced in the Budget.

Indexation of the draught beer excise and excise equivalent customs duty rates will be paused in a measure costing about $165 million over five years.

Strengthening competition law

Small business will benefit from the government’s decision to work with the states and territories to extending unfair trading practices protections to small businesses.

Over $7 million will be provided over two years to strengthen the Australian Competition and Consumer Commission’s enforcement of the Franchising Code.

Subject to consultation, protections from unfair contract terms and unfair trading practices will be extended to all businesses regulated by the Franchising Code.

Supporting Australian businesses

Local companies will also benefit from $20 million in additional support for the Buy Australian Campaign, which encourages consumers to buy Australian-made products.

The Budget further supported local businesses with $16 million in funding for a new Australia-India Trade and Investment Accelerator Fund.

Additional ATO tax compliance funding

The ATO will be happy, with the 2025 Budget providing $999 million over the next four years to extend and expand its tax compliance activities.

This includes additional funding for the shadow economy and personal income tax compliance programs, together with $50 million from 1 July 2026 to ensure the timely payment of tax and unpaid super liabilities by businesses and wealthy groups.

Information in this article has been sourced from the Budget Speech 2025-26 and Federal Budget Support documents.  


It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change. 

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How to master FBT compliance

Preparing for the Fringe Benefits Tax (FBT) year-end is never a walk in the park and, with the ATO now using increasingly sophisticated data matching programs, it is more important than ever to get your return right.

As part of the ATO’s post-pandemic campaign to improve taxpayer compliance and payment of tax debts, the ATO is using data matching tools to check whether businesses should be reporting employee fringe benefits and paying tax on them.i

As a small business owner, you shoulder full responsibility for accurately calculating the taxable value of all fringe benefits, lodging the FBT return, paying any required tax, and reporting fringe benefits on an employee’s payment summary if the individual benefits exceed $2,000.ii

Areas to check in your FBT return

Vehicle benefits are a continuing source of mistakes when it comes to FBT returns. The ATO is particularly interested in commercial vehicles (mainly dual cab utes) provided to employees. Many employers wrongly believe these vehicles are fully FBT-exempt. But an exemption only applies where private use of the vehicle is minor and infrequent.

FBT rules about the use of employee car parking have also been tightened. FBT usually applies if you provide your employees with parking in a commercial car park, although many small businesses are eligible for an FBT exemption under specific conditions.iii

Dining and EV benefit rules

Entertainment and in-house dining fringe benefits are another area where it’s easy to be caught out.

Ensure you have detailed records related to these types of benefits (including any contributions made by employees) and check the benefits provided have met the ‘minor and infrequent‘ rule.

Also keep an eye on the implications of new rules covering electric vehicle (EV) benefits.

Getting employees to play their part

To simplify the process of putting your FBT return together, it helps if your employees play their part.

For example, encourage employees who use salary packaging to spend all of their available annual balance before 31 March to avoid the headache of unspent or claimed benefits rolling over into the next FBT year.

If employees do not use their unspent balance, it still needs to be reported and deducted from their cap limit in the new FBT year, which can create additional paperwork.

Employee declarations

If you plan to use the FBT exemptions and concessions on offer, you may also need to obtain detailed records from your employees (such as travel diaries, logbooks, declarations and odometer records).iv

Any change in car usage due to a new work role needs to be noted and the business use percentage adjusted, or a new logbook started.

Start collating this information as early as possible to simplify the calculation and lodgement process.

Meeting the lodgement deadline

Unlike the normal tax year, the FBT year ends on 31 March, with the 21 May lodgement and payment deadline giving you only a short window to get your paperwork in order. If you lodge with an accountant the deadline is 25 June.

You need to determine the taxable value of the different fringe benefits your employees have received during the year, calculate the tax you need to pay and collect any required employee declarations.

All employee declarations must be obtained by the time your FBT return is due to be lodged. Even if you do not have to lodge a return, you must have the declarations by 21 May.

We can help with any questions you may have and assist you with preparing your FBT return.

 i Addressing collectable tax debt – Tax Institute’s Tax Summit 2023 | Australian Taxation Office

ii Reportable fringe benefits | Australian Taxation Office

iii Fringe benefits tax – a guide for employers | Legal database

iv Employee declarations | Australian Taxation Office

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