The government has announced some key changes to the proposed Division 296 super tax following industry feedback.

The tax will now only apply to realised investment earnings — that is, actual profits when an asset is sold — rather than unrealised gains on paper.

It will still apply to super balances over $3 million, with those earnings taxed at 30%, but there will now be a second tier for balances over $10 million, where earnings will be taxed at 40%.

Both thresholds will be indexed to keep pace with inflation, and the new rules are set to start from 1 July 2026, with the first tax assessments expected in 2028.

Treasurer Jim Chalmers said the changes are designed to make the system fairer while maintaining generous tax concessions for the vast majority of super fund members.

In a world of constant financial noise, from market updates and interest rate speculation to economic forecasts, it’s easy to feel overwhelmed and choose to do nothing.

But inaction can be costly when it comes to building long-term wealth. Whether it’s leaving money in cash, delaying investment decisions or ignoring the power of regular contributions, the financial consequences of sitting still can quietly erode your future goals.

Inflation is a wealth killer

One of the most overlooked risks of doing nothing is inflation. While your money might feel ‘safe’ sitting in a savings account or term deposit, its purchasing power is shrinking every year.

For example, if you’d tucked $10,000 under the mattress in 2014, ten years later in 2024 it was worth just $6926.70 in real terms, thanks to the average annual inflation rate of 2.7 per cent. That’s a 30.7 per cent loss in value without spending a cent.ⁱ

Even in low-inflation environments, the real return on cash is often negative once you factor in tax and inflation.

The ‘cost’ of cash

Holding too much cash for too long can be a drag on your portfolio’s performance. While cash plays an important role, it’s not designed for long-term growth.

Consider this:

• Over the past 30 years, Australian shares have returned an average of 9.3 per cent per year, while cash has returned 4.1 per cent annually.ⁱⁱ
• That difference compounds significantly over time. Based on those rates, $100,000 invested in shares could grow to approximately $1.4 million in 30 years, while the same amount in cash might only reach around $330,000.

By staying in cash, investors miss out on the growth potential of other asset classes.

The perils of ‘set and forget’

Many investors start out with good intentions. They set up a portfolio, make an initial contribution and then leave it untouched for years.

While long-term investing is a sound strategy, neglecting your portfolio entirely can lead to missed opportunities.

Here’s what you need to be aware of:

• Asset allocation changes – Market movements over time can affect your portfolio’s intended risk profile.
• Dividends – If dividends are paid out and not reinvested, you lose the benefit of the compounding effect.
• Changing goals – Your financial needs are likely to change as you age, but your portfolio won’t reflect that unless it’s reviewed.

Annual check-ups can help ensure your investments are still working for you.

Missed opportunities

Compound interest is one of the most powerful tools in wealth creation. But compounding works best if you’re consistently contributing and reinvesting.

Consider two hypothetical investors who both invest $10,000 earning an average 7 per cent per annum:

• Investor A contributes an extra $5,000 each year
• Investor B contributes nothing after the initial $10,000 investment

After 30 years (and not accounting for fees and other costs):

• Investor A may end up with more than $500,000
• Investor B may end up with around $76,000

The difference? Regular contributions and the magic of compounding.

You can do your own calculations with ASIC’s MoneySmart calculator.

From passive wealth to active growth

The cost of doing nothing can be even more pronounced for high-net-worth investors. With larger sums at play, the opportunity cost of holding excess cash or delaying strategic investment decisions can translate into millions of dollars in missed growth over time.

While capital preservation is important, so is capital productivity. Allocating funds across diversified asset classes can help balance risk while enhancing long-term returns.

Inaction, especially in times of market uncertainty, may feel prudent, but it often results in underutilised capital that fails to keep pace with inflation or evolving financial goals.

After all, your financial plan should evolve with you. A portfolio designed five years ago may no longer suit your goals, risk tolerance or tax situation. Life changes – marriage, children, career shifts, retirement planning – and your investments should reflect those changes.

The bottom line

Doing nothing might feel safe but it’s often the riskiest choice of all. Inflation erodes your savings; cash underperforms over time and missed opportunities can delay or derail your financial goals.

By taking small, consistent steps such as contributing regularly, reinvesting earnings and reviewing your plan regularly, you can build a strong foundation for long-term financial success.

We’re here to help you take control and make your money work harder for your future.

i Inflation Calculator | RBA

ii Vanguard index chart 2025

What You Can Do!

Leaving debts outstanding with the ATO is now more expensive for many taxpayers.

General interest charge (GIC) and shortfall interest charge (SIC) imposed by the ATO is no longer tax-deductible from 1 July 2025. This applies regardless of whether the underlying tax debt relates to past or future income years.

With GIC currently at 11.17%, this is now one of the most expensive forms of finance in the market — and unlike in the past, you won’t get a deduction to offset the cost. For many taxpayers, this makes relying on an ATO payment plan a costly strategy.

Refinancing ATO debt

Businesses can sometimes refinance tax debts with a bank or other lender. Unlike GIC and SIC amounts, interest on these loans might be deductible for tax purposes, provided the borrowing is connected to business activities.

While tax debts will sometimes relate to income tax or CGT liabilities, remember that interest could also be deductible where money is borrowed to pay other tax debts relating to a business, such as:

• GST
• PAYG instalments
• PAYG withholding for employees
• FBT

However, before taking any action to refinance ATO debt it is important to carefully consider whether you will be able to deduct the interest expenses or not.

Individuals

If you are an individual with a tax debt, the treatment of interest expenses incurred on a loan used to pay that tax debt really depends on the extent to which the tax debt arose from a business activity:

• Sole traders: If you are genuinely carrying on a business, interest on borrowings used to pay tax debts from that business is generally deductible.
• Employees or investors: If your tax debt relates to salary, wages, rental income, dividends, or other investment income, the interest is not deductible. Refinancing may still reduce overall interest costs depending on the interest rate on the new loan, but it won’t generate a tax deduction.

Example: Sam is a sole trader who runs a café. He borrows $30,000 to pay his tax debt, which arose entirely from his café profits. The interest should be fully deductible.

However, if Sam also earns salary or wages from a part-time job and some of his tax debt relates to the employment income, only a portion of the interest on the loan used to pay the tax debt would be deductible. If $20,000 of the tax debt relates to his business and $10,000 relates to employment activities, then only 2/3rds of the interest expenses would be deductible.

Companies and trusts

If a company or trust borrows to pay its own tax debts (income tax, GST, PAYG withholding, FBT), the interest will usually be deductible if it can be traced back to a debt that arose from carrying on a business.

However, if a director or beneficiary borrows money personally to cover those debts, the interest would not normally be deductible to them.

Partnerships

The position is more complex when it comes to partnership arrangements. If the borrowing is at the partnership level and it relates to a tax debt that arose from a business carried on by the partnership then the interest should normally be deductible. For example, this could include interest on money borrowed to pay business tax obligations such as GST or PAYG withholding amounts.

However, the ATO takes the view that if an individual who is a partner in a partnership borrows money personally to pay a tax debt relating to their share of the profits of the partnership, the interest isn’t deductible. The ATO treats this as a personal expense, even if the partnership is carrying on a business activity.

Practical takeaway

Leaving debts outstanding with the ATO is now more expensive than ever because GIC and SIC are no longer deductible.

Refinancing the tax debt with an external lender might provide you with a tax deduction and might also enable you to access lower interest rates.

The key is to distinguish between tax debts that relate to a business activity and other tax debts. For mixed situations, you may need to apportion the deduction.

If you’re unsure how this applies to you, talk to us before arranging finance. With the right strategy, you can manage tax debts more effectively and avoid costly surprises.

Understand the latest indexed changes to the pension income and assets tests

Receiving the full government Age Pension, or even a partial pension payment, can provide eligible retirees with a significant amount of income over time that can supplement income earned from other assets.

Millions of Australians are eligible to receive Age Pension payments every fortnight once they turn 67.

But there are strict limits on how much individuals and couples can earn, and on the value of assets that can be held, which the government uses to determine eligibility.

While there were no changes to the fortnightly Age Pension payment rates themselves on 1 July, the start of the 2025-26 financial year saw some indexed increases to both the income and assets test limits used by the government to determine eligibility for the pension.

For example, individuals can now earn to $218 per fortnight (a $6 increase) and couples up to $380 per fortnight (an $8 increase) and still receive the full Age Pension.

Assets test limits have also increased for individuals and couples by between $7,500 and $17,500, depending on home ownership status.

For example, individual homeowners can now have up to $321,500 in assets in addition to the value of their home (an increase of $7,500) and still receive the full Age Pension. For couples who are homeowners, the total amount is now $481,500 (an increase of $11,500).

The asset test limits are higher for non-homeowners.

It’s important to know the Age Pension test limits. The following tables, sourced from the Department of Social Services, provide a detailed breakdown of the latest income test and assets test changes.

The income test

Individuals and couples can earn up to a set amount of income every fortnight in addition to the Age Pension to receive the maximum pension payment.

The pension amount received will then be reduced for every dollar of income earned above the maximum payment limit and will totally cut out at the government’s disqualifying income limit.

What the income test limits are for a full pension

Single person

Income per fortnight	Amount your pension will reduce by
Up to $218 (free area)	$0
Over $218	50 cents for each dollar over $218

Couple living together or apart due to ill health

Different rates apply for partners getting a payment other than a pension.

Combined income per fortnight	Amount each member of the couple’s pension will reduce by
Up to $380 (free area)	$0
Over $380	25 cents for each dollar over $380

What the cut-off points are

If your income in a fortnight goes over the cut-off point, the government will pay $0 for that fortnight.

Your cut-off point may be higher if you receive Rent Assistance or Work Bonus, or may be lower if you don’t live in Australia.

Your situation	Fortnightly income cut off point
Single	$2,516.00
A couple living together	$3,844.40 combined
A couple living apart due to ill health	$4,976.00 combined
A transitional rate pensioner – single	$2,580.00
Transitional rate pensioners – couple living together	$4,191.50 combined
Transitional rate pensioners – couple living apart due to ill health	$5,104.00 combined

The assets test

The government also applies the assets test (based on property or possessions owned in full, in part, and assets that an individual or couple have a financial interest in) to determine whether individuals and couples can qualify for full or part pension payments.

What the assets test limits are for a full pension

When your assets are more than the limit for your situation, your pension will reduce.

If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.

Your situation	Homeowner	Non-homeowner
Single	$321,500	$579,500
A couple, combined	$481,500	$739,500
A couple, separated due to illness, combined	$481,500	$739,500
A couple, one partner eligible, combined	$481,500	$739,500

What the limits are for a part pension

From 1 July 2025, part pensions cancel when your assets are over the cut off point for your situation.

If you’re a member of a couple, the limit is for both your and your partner’s assets combined, not each of you.

Your situation	Homeowner	Non-homeowner
Single	$704,500	$962,500
A couple, combined	$1,059,000	$1,317,000
A couple, separated due to illness, combined	$1,247,500	$1,505,500
A couple, one partner eligible, combined	$1,059,000	$1,317,000

Conclusion

The Age Pension provides a fortnightly government payment that acts as a financial safety net. Even a part pension can help cover essential living costs like groceries, utilities, and healthcare, reducing the pressure on your superannuation or personal savings.

Many retirees draw income from superannuation, investments, or part-time work. The Age Pension can supplement these sources, helping to smooth out fluctuations in investment returns or market downturns.

The Age Pension is indexed and paid for life, offering protection against outliving your savings. This is especially valuable as people live longer and may need income support well into their 80s or 90s.

Combining the Age Pension with other income streams allows for greater flexibility in managing your finances.

You can draw less from your super during market downturns or use the pension to cover fixed costs, preserving your capital for discretionary spending or emergencies.

Source: Vanguard July 2025
This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™

 

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The best time to start planning for retirement is yesterday.

But the second-best time? Today.

About two-thirds of Australians retire earlier than they anticipated because of unexpected events such as job loss or redundancy, they need to care for a family member, have a sudden illness or injury, problems at work or a partner’s decision to retire.ⁱ

But, whether you’re in your 50s, 60s, or even beyond, it’s never too late to take meaningful steps toward a more secure and fulfilling retirement.

The good news is that with the right guidance and a few smart moves, you can still build a retirement plan that reflects your values, supports your lifestyle and gives you peace of mind.

Where to begin

Before you make any changes, it’s important to understand your current financial position. This includes:

• your superannuation balance
• other savings or investments
• debts such as your mortgage, credit cards and personal loans
• expected retirement income sources including the Age Pension, rental income and part-time work

Boost your super

Even if you’re starting later, there are ways to accelerate your super growth using:

• Salary sacrifice Contributing pre-tax income into super can reduce your taxable income while boosting your retirement savings.
• Personal contributions You may be eligible for a tax deduction or government co-contribution depending on your income.
• Catch-up contributions You may be eligible to add to your super but be aware of the caps on contributions.ⁱⁱ

These strategies can be especially powerful in your 50s and 60s, when your income may be higher and retirement is on the horizon.

It’s also a good idea to regularly consider your super investment options and review your risk tolerance and time horizon.

Deal with debt

If possible, getting your debt under control before you retire is a useful strategy.

You could consider using your superannuation or other savings or downsize your home to pay off a mortgage or other loans. But first, it’s essential to carefully check the tax impact, the effect on your super and whether any potential government benefits will be affected.

Reassess your lifestyle goals

Retirement isn’t just about money, it’s about how and where you want to live, how much travel you’d like to do and if you’d continue to work part-time.

Clarifying your lifestyle goals helps shape your financial strategy. It also ensures your retirement plan reflects your values, not just your bank balance.

How much will I really need?

Aim to create a retirement budget. Estimate your future expenses including housing, food, travel and healthcare and compare them to your expected income. This helps identify any shortfalls and guides your savings strategy.

You will also need to consider the amount of time you might spend in retirement. This will depend on when you retire (planned or unexpected) and how long you live. This is called longevity risk. Given life expectancy is unpredictable, there is a possibility that your retirement savings may not last throughout retirement.

Understand your entitlements

Many Australians are eligible for government support in retirement, including:

• Age Pension Based on income and assets, available from age 67 (for those born after 1957).
• Concession cards For discounts on healthcare, transport and utilities.
• Rent assistance If you’re renting privately and receive the Age Pension.

Even if you don’t qualify now, you may be able to restructure your finances to maximise future entitlements.

Review regularly and remain flexible

Retirement planning isn’t a one-time event. Life changes and so should your strategy. Regular reviews help you:

• Adjust for market movements or legislative changes
• Update your goals and spending patterns
• Ensure your estate planning is current

Flexibility is key. Whether you retire gradually, take a sabbatical, or pivot to a new venture, your plan should evolve with you.

Next steps

Retirement planning is about taking the next step rather than chasing perfection. Whether you’re starting late or simply refining your strategy, every step you take now helps shape a more secure and meaningful future.

And remember that retirement isn’t an end point. It’s a new beginning even if you retire earlier than you anticipated. With the right plan in place, you can step into this next chapter with clarity, confidence and purpose.

We’d be happy to help you review your current retirement plan and identify any gaps in retirement goals and create a strategy should you need to retire earlier than expected.

i Retirement and Retirement Intentions, Australia, 2022-23 financial year | Australian Bureau of Statistics

ii Understanding concessional and non-concessional contributions | Australian Taxation Office

 

On 1 July 2025 the superannuation guarantee rate increased to 12% which is the final stage of a series of previously legislated increases. Employers currently need to make superannuation guarantee (SG) contributions for their employees by 28 days after the end of each quarter (28 October, 28 January, 28 April and 28 July). There is an extra day’s allowance when these dates fall on a public holiday.

To comply with these rules the contribution must be in the employee’s superannuation fund on or before this date, unless the employer is using the ATO small business superannuation clearing house (SBSCH).

The ATO has been applying considerable compliance resources in this space in recent years which can have an impact on both employees and employers.

Employers

To be eligible to claim a tax deduction on SG contributions the quarterly amount must be in the employee’s super account on or before the above quarterly due dates. The only exception to this is where the employer is using the ATO SBSCH. In that case a contribution is considered made provided it has been received by the SBSCH on or before the due date.

Employers using commercial clearing houses should be mindful of turnaround times. Commercial clearing houses collect and distribute employee contributions and may be linked to accounting / payroll software or provided by some superannuation platforms. Anecdotally it seems that turnaround times for some clearing houses could be up to 14 days, so it is recommended that employers allow sufficient time before the quarterly deadlines when processing their employee SG contributions.

If these deadlines are missed (yes even by a day!) that will trigger a superannuation guarantee charge (SGC) requirement which will result in a loss of the tax deduction and other penalties. The SGC requirements are outlined in the ATO link below:

The super guarantee charge | Australian Taxation Office

Employers do have the option to make SG payments more frequently than quarterly and this is something that employers will need to become used to if the proposed ‘payday’ superannuation reforms become law. This change is proposed to commence from 1 July 2026 and would require SG to be paid at the same frequency as salary or wages. There is some discussion on the payday super proposal at this link (noting that this is not yet law). The SBSCH will close at this time so employers using this service should start to consider transitioning to a commercial clearing house, please let us know you would like assistance with this.

Employees

It is recommended that you regularly check your superannuation fund statements and reconcile employer contributions to the amounts listed on your pay slips.

Where SG contributions are not received on time (or at all!) employees are encouraged to discuss this first with their employer. Should this not result in a satisfactory conclusion, employees can consider bringing this to the attention of the ATO.

There is some helpful discussion on this process at the following link.

The Productivity Commission (PC) has been tasked by the Australian Government to conduct an inquiry into creating a more dynamic and resilient economy. The PC was asked to identify priority reforms and develop actionable recommendations.

The PC has now released its interim report which presents some draft recommendations that are focused on two key areas:

• Corporate tax reform to spur business investment
• Where efficiencies could be made in the regulatory space (ie, cutting down on red tape)

The interim report makes some interesting observations and key features of the draft recommendations are summarised below.

Corporate tax reform

The PC notes that business investment has fallen notably over the past decade and that the corporate tax system has a significant part to play in addressing this. The PC is basically suggesting that the existing corporate tax system needs to be updated to move towards a more efficient mix of taxes. The first stage of this process would involve two linked components:

• Lower tax rate: businesses earning under $1 billion could have their tax rate reduced to 20%, with larger businesses still subject to a 30% rate.
• New cashflow tax: a net cashflow tax of 5% should be applied to company profits. Under this system, companies would be able to fully deduct capital expenditure in the year it is incurred, encouraging investment and helping to produce a more dynamic and resilient economy. However, the new tax is expected to create an increased tax burden for companies earning over $1 billion.

Cutting down on red tape

The interim report notes that businesses have reported spending more time on regulatory compliance – this probably doesn’t come as a surprise to most business owners who have been forced to deal with multiple layers of government regulation. Some real world examples include windfarm approvals taking up to nine years in NSW while starting a café in Brisbane could involve up to 31 separate regulatory steps.

The proposed fixes include:

• The Australian Government adopting a whole-of-government statement committing to new principles and processes to drive regulation that supports economic dynamism.
• Regulation should be scrutinised to ensure that its impact on growth and dynamism is more fully considered.
• Public servants should be subject to enhanced expectations, making them accountable for delivering growth, competition and innovation.

These are simply draft recommendations contained in an interim report so we are a long way from any of these recommendations being implemented. However, the interim report provides some insight into areas where the Government might look to make some changes to boost productivity in Australia.

The PC is inviting feedback up until 15 September on the interim report before finalising its recommendations later this year.

How much tax you pay on your super contributions and withdrawals depends on:

• your total super amount
• your age
• the type of contribution or withdrawal you make

If you inherit someone’s super after they die, the person’s super fund pays you a super death benefit. You may have to pay tax on some of this benefit.

Because everyone’s situation is different, it’s always best to get advice about tax matters. Contact the Australian Taxation Office (ATO) or speak to us.

How super contributions are taxed

Money paid into your super account by your employer is taxed at 15%. So are salary-sacrificed contributions, also known as concessional contributions.

There are some exceptions to this rule:

• If you earn $37,000 or less, the tax is paid back into your super account through the low-income super tax offset (LISTO) .
• If your income and super contributions combined are more than $250,000, you pay Division 293 tax, an extra 15%.

If you make contributions from your after-tax income – known as non-concessional contributions – you don’t pay any contributions tax.

See the ATO website for more information about how much tax you’ll pay on super contributions.

Smart tip: To avoid paying extra tax on your super, make sure you give your super fund your Tax File Number.

How super investment earnings are taxed

Earnings on investments within your super fund are taxed at 15%. This includes interest and dividends, less any tax deductions or credits.

How super withdrawals are taxed

The amount of tax you pay depends on whether you withdraw your super as:

• a super income stream, or
• a lump sum

Everyone’s financial situation is unique, especially when it comes to tax. Make an informed decision. We recommend speaking to us before you decide to withdraw your super.

Super income stream

A super income stream is when you withdraw your money as small regular payments over a long period of time.

If you’re aged 60 or over, this income is usually tax-free.

If you’re under 60, you may pay tax on your super income stream.

Lump sum withdrawals

If you’re aged 60 or over and withdraw a lump sum:

• You don’t pay any tax when you withdraw from a taxed super fund.
• You may pay tax if you withdraw from an untaxed super fund, such as a public sector fund.

If you’re under age 60 and withdraw a lump sum:

• You don’t pay tax if you withdraw up to the ‘low rate cap’, currently $260,000.
• If you withdraw an amount above the low rate cap, you pay 17% tax (including the Medicare levy) or your marginal tax rate, whichever is lower.

If you have not yet reached your preservation age:

• You pay 22% (including the Medicare levy) or your marginal tax rate, whichever is lower.

When someone dies

When someone dies, their super is usually paid to their beneficiary. This is called a super death benefit.

If you’re a beneficiary, the amount of tax you pay on a death benefit depends on:

• the tax-free and taxable components of the super
• whether you’re a dependent for tax purposes
• whether you take the benefit as an income stream or a lump sum

Contact us today if you have any questions.

 

 

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at Moneysmart .
Important note: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete and accept no liability except where required by law.” .
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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.

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.ⁱⁱ

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. ⁱⁱⁱ

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”.iv

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.^v

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.^vi

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 Understanding Div296 I How will taxation of unrealised gains work

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

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

v SMSF administration and reporting | Australian Taxation Office

vi About SMSFs | Australian Taxation Office