Preparing Your SMSF for EOFY in 2026

As the end of the financial year (EOFY) 2025/26 approaches, SMSF trustees must get their funds in order now. Delaying can mean missing tax concessions or breaching super rules, potentially resulting in penalties, extra tax, or ATO scrutiny for errors such as excess contributions, incorrect valuations, or unmet compliance obligations.

What Happens if You Breach Super Rules

If your SMSF breaches superannuation rules, consequences may include loss of tax concessions,  ATO penalties, and a requirement to rectify the error. For instance, if you contribute more than the annual cap, you could face extra tax on the excess amount. Incorrect asset valuations or related-party transactions may also trigger compliance actions. Addressing these issues before EOFY is critical to avoid more severe penalties.

Rectifying Breaches Before Year-End

If you suspect a breach has occurred, act straight away. Steps include:

• Consult your SMSF advisor or accountant for guidance on rectification.
• Reviewing fund transactions and records to identify errors.
• Take corrective measures after consultation with your SMSF advisor.
• Documenting all actions taken to resolve the breach.

EOFY Checklist for SMSF Trustees

• Confirm total employer and personal deductible contributions. Consider making top-up contributions up to the $30,000 annual cap.
• Check member eligibility to use ‘Carry-Forward’ contributions (unused amounts from previous years that can be added to this year’s limit) to increase their concessional cap (the maximum pre-tax contributions allowed to superannuation) for the year.
• Check if a member making non-concessional contributions is allowed to do so. Make sure they do not exceed the $120,000 maximum non-concessional cap for 2025/26. The member’s total super balance must be less than $2 million at 30 June 2025.
• A member may be able to ‘Bring Forward’ up to two years of non-concessional contributions, provided certain rules are met. This depends on the member’s age and whether their total super balance from the prior year is less than $1.76 million. If they have not triggered this rule before, they could contribute up to $360,000 in 2025/26.
• Review the documentation to confirm that the claim for personal concessional tax deductions for members is valid: a member must advise the SMSF trustee of the amount they will be claiming as a tax deduction (commonly called a section 290-170 notice), and the SMSF trustee must acknowledge it before a contribution can be claimed.
• Make sure minimum pension payments are made before 30 June. The minimum payment is a percentage of a member’s pension balance from the prior 30 June. It is 4% for members aged 55 to 64 and increases up to 14% for members aged 95 and above.
• Do you need to take any action regarding the implementation of the new Div 296 tax provisions?
• Review and update asset valuations for 30 June.
• Confirm compliance with related party transactions, including leases and loans.
• Verify that all fund expenses and income are properly documented and bring forward expenses where possible.
• Consult your SMSF advisor about any uncertainties or potential breaches.
• Is your fund being wound up before 30 June? Have all necessary actions been implemented or scheduled to be completed before the end of the year?
• For any member exiting the fund before 30 June and rolling their super balance to another fund, check the trustee structure, review the cashflow, and confirm the details required to roll over the member’s balance.
• Check that your SMSF has a valid Electronic Service Address (ESA). Ensure it is SuperStream-compliant to process rollovers and receive unrelated employer contributions. Your SMSF annual return must be lodged on time. If not, the fund’s regulated status could be removed. Then contributions through SuperStream would not be eligible.
• Review your fund’s compliance with the limited recourse borrowing arrangement (LRBA) rules and update interest rates at 1 July if the loan is a related party loan using the safe harbour guidelines.
• From 1 July 2026, the new Payday super rules require SMSFs to allocate employer contributions to members’ accounts within 3 business days of receipt. An SMSF must return a contribution if it cannot accept it. Payday Super requires employers to pay Super guarantee contributions (SG) at the same time as salary and wage payments.
• Check for outstanding ATO debts or lodgements, as well as outstanding ASIC payments and lodgements if your SMSF has a corporate trustee.

To further support your preparations, here is additional detail on key EOFY checklist tasks.

Make your EOFY contributions before 30 June. If you contribute electronically or use a clearing house close to 30 June, the fund may not receive it until after the year ends. In that case, it will not count as a 2025/26 contribution. Your employer then cannot claim a tax deduction for 2025/26.

To claim a tax deduction for personal contributions, give the trustee notice on time. Do this before your tax return is lodged or before the end of the following financial year, whichever is earlier. In some cases, the section 290-170 notice must be given before a certain event, or the deduction will not count:

• starting a pension
• lodging a spouse’s contributions-splitting application
• requesting a lump sum payment or rollover of all contributions

To be eligible to claim a tax deduction, certain age conditions apply, and a work-test or work-test exemption must be met if you are aged 67 to 75.    The ATO focuses on property market valuation, and it is important to ensure the value can be supported by independent third parties.

The ATO focus on the market valuation of properties, and it is important to ensure the value can be supported by independent third parties.

A common audit issue is related-party leases. The lease should reflect commercial terms, supported by a qualified valuer or real estate agent, and include examples of comparable rents. A new rental valuation should be obtained when starting a new lease or extending the term. Check the lease’s expiration date because a new lease may be needed before 30 June.

If a fund holds a related-party trust, the auditor may require evidence for the valuation of an underlying property, rent valuation for property leased to a related party, a copy of the trust’s bank statements, and evidence of significant assets and liabilities.

The new Division 296 tax rules do not start until 1 July 2026. However, it is important to start planning if you may be affected. In the first year of operation, an in-scope member (subject to Div 296 tax) will be a member with a total superannuation balance exceeding $ 3 million at 30 June 2027. An SMSF can opt in to adjust the cost base by removing unrealised capital gains from assets held as at 30 June 2026, solely for the purposes of Div 296 tax calculations.

Acting early helps protect your fund’s compliance, maximises concessions, and reduces year-end stress. Stay organised and seek advice if you’re unsure: EOFY is your chance to keep your SMSF on track.