SMSF Tax Return

There are two types of taxable income – income of a revenue nature and income of a capital nature. Capital losses can’t be offset against revenue gains for the calculation of taxable income. Capital losses are quarantined and can only be utilised against capital gains.

When an SMSF goes into pension mode, all gains become tax free, so the Fund won’t pay any tax on its SMSF income. The ultimate objective of an SMSF is to move into a tax-free environment.

Generally, tax rates are lower in Superannuation than in other environments; therefore, there is usually an advantage to put more money in Superannuation.

Example:

An SMSF bought BHP shares at $10 per share. If the SMSF keeps the shares until retirement phase and sell the shares at $45, the total gain of $35 will be tax-free.

Question: My SMSF has $10,000 from bank interests, but the SMSF investment portfolio (shares) is down to $4,000. Can the SMSF offset losses from the portfolio against the bank interests if the SMSF sells the shares?

Answer: Short answer – No. Shares are held on capital account and losses on capital account will be quarantined. Only capital gains can be applied against capital losses. Interest is of a revenue nature and will be taxed at 15%. Expenses offset against this cannot be of a capital nature. You can deduct bank fees, accounting and auditing costs.

Annual Tax Returns

If you are a client of Superannuation Warehouse, we act as your Tax Agent to complete and submit your SMSF tax return. If your SMSF use a registered Tax Agent like Superannuation Warehouse, the SMSF gets an extension to submit its tax return. The Tax Return is generally due 15 May the following calendar year, i.e. 10.5 months after the year end.

For a copy of SMSF annual tax returns and instructions on how to complete the tax return for recent years, click on the links below.

• SMSF 2024 return and 2024 Annual Return instructions
• SMSF 2023 return and 2023 Annual Return instructions
• SMSF 2022 return and 2022 Annual Return instructions
• SMSF 2021 return and 2021 Annual Return instructions
• SMSF 2020 return and 2020 Annual Return Instructions
• SMSF 2019 return and 2019 Annual Return Instructions
• SMSF 2018 return and 2018 Annual Return Instructions
• SMSF 2017 return and 2017 Annual Return Instructions
• SMSF 2016 return and 2016 Annual Return Instructions
• SMSF 2015 return and 2015 Annual Return Instructions
• SMSF 2014 return and 2014 Annual Return Instructions
• SMSF 2013 return and 2013 Annual Return Instructions
• SMSF 2012 return and 2012 Annual Return Instructions
• SMSF 2011 return and 2011 Annual Return Instructions
• SMSF 2010 return and 2010 Annual Return Instructions

SMSF Supervisory Levy

The SMSF Supervisory Levy  for the 2020 and later financial years is $259 per annum for an SMSF. The Supervisory Levy is payable to the ATO when the annual SMST return is lodged.

Pay As You Go (PAYG)

Pay As You Go (PAYG) Instalments is a system for paying instalments during the income year towards an SMSF’s expected tax liability on the income. The PAYG instalments for the financial year are credited against the annual tax assessment to determine whether the Fund owes more tax or are owed a refund.

RNN

When an SMSF is newly set up and there are no transactions in the SMSF at 30 June of that financial year, the Trustee of the Fund need to provide us a confirmation noting the SMSF first received a rollover/contribution into the SMSF bank account in the next financial year. Superannuation Warehouse can request the ATO to approve a RNN (Return Not Necessary). This is to advise the ATO that there are no transactions in the SMSF and the Trustee has the intention of operating the SMSF in the following financial year. The ATO gives some guidance on how to complete a RNN. Remember, the RNN, can only be submitted once. In the following year if there are still no transactions in the SMSF, the SMSF has to be closed down.

SMSF Annual Return: Avoid these top five errors

The ATO has listed five most common errors that are identified in the lodgement of SMSF annual returns.

• 1. Not including a bank account in the Fund’s name

  The Bank Account of the SMSF must be under the name of the SMSF and separate from the Trustees’ individual bank accounts. This Bank Account details must be included in the annual tax return. Please click here for more information on how to set up an SMSF bank account.

• 2. Providing an incorrect electronic service address (ESA)

  An ESA is a data format which allows the SMSF to receive electronic remittance advice and contributions if the Members are receiving super from non-related employers. Please click here for more information on how to obtain a SuperStream code.

• 3. Not valuing SMSF assets at market value

  All Assets in the SMSF must be reported at market value as at 30 June. Valuations can be conducted by Trustees and we explain how to value SMSF assets here.

• 4. Trying to lodge with zero Assets

  The Trustee can request the ATO to approve a return not necessary (RNN), if an SMSF is yet to receive contributions or rollovers in the SMSF’s first year. The ATO will not accept a tax return from an SMSF that has no assets unless the fund is being wound up.

• 5. Incorrect or no Auditor details in Tax Return

  The SMSF must have the financial statements and records audited each year by an approved SMSF external Auditor prior to lodging the Tax Return. Please click here for more information on Auditor independence.

As a Registered Tax Agent, we complete tax returns for the Funds we administer. We always make sure to follow ATO guidelines to ensure an effective year end process. For more information on the services we offer, please follow this link.

FAQs on SMSF Tax Returns & Audits

FAQs on SMSF Accounting