au-smsf

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# Australia Self-Managed Super Funds (SMSF) -- Accounting, Tax & Compliance Skill v1.0

## Australia Self-Managed Super Funds (SMSF) -- Accounting, Tax & Compliance Skill v1.0

> **General reference only.** This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

> **Law-change context (2026-27).** Three regime changes hit SMSF files this year. (1) **Division 296** is law (Building a Stronger and Fairer Super System Act 2026): from 2026-27 an EXTRA 15% applies to the earnings proportion attributable to total super balance (TSB) between $3m and $10m, and an extra 25% above $10m -- realised-earnings basis, thresholds indexed, levied on the MEMBER personally, not the fund. (2) **Payday super**: employer contributions now arrive within 7 business days of each payday -- frequent small receipts are the new normal and the fund's ESA/bank details must work. (3) The **NALE rules** as amended by the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 cap general-expense NALI at TWICE the expense shortfall (applied from 2018-19). This skill covers SMSF accounting, tax and compliance only -- it is NOT financial product advice (see R-AU-SF-1).

## Section 1 -- Quick reference

**Read this whole section before computing or classifying anything.**

**Quick reference**

| Field | Value |
| --- | --- |
| Country | Australia |
| Primary legislation | Superannuation Industry (Supervision) Act 1993 (SIS Act) + SIS Regulations 1994; ITAA 1997 Div 295 |
| Regulator | ATO (SMSFs); ASIC (approved SMSF auditors, trustee companies) |
| Income year | 2026-27 (1 July 2026 -- 30 June 2027) |
| Fund tax rate (complying) | 15% on low-tax component (earnings + assessable contributions, s 295-160) |
| Discounted capital gains | 1/3 discount if held 12+ months -> 10% effective |
| ECPI (retirement-phase earnings) | 0% -- segregated or proportionate (actuarial certificate) method |
| NALI / non-complying fund | 45% |
| No-TFN contributions | Extra 32% on mandated employer contributions (complying fund) |
| Supervisory levy | $259/year (unchanged since 2014-15), paid a year IN ADVANCE with the SAR; new fund's first SAR: $518 |
| SAR due dates | Self-lodgers: new/overdue 31 Oct (pay 1 Dec), others 28 Feb. Tax agent: first year 28 Feb (31 Oct if ATO-reviewed at registration); ongoing per agent program (generally 15 May) |
| Audit | ASIC-registered approved SMSF auditor, appointed >= 45 days before SAR due; audit finalised BEFORE lodgment |
| Max members | 6 (since 1 July 2021) |
| Concessional cap (2026-27) | $32,500 (carry-forward if TSB < $500,000 at prior 30 June) |
| Non-concessional cap (2026-27) | $130,000; bring-forward by TSB at 30 June 2026 (Rule 8) |
| General transfer balance cap | $2,100,000 (2025-26: $2.0m); personal caps vary (proportional indexing) |
| Minimum pension drawdowns | 4% (under 65) to 14% (95+) -- no reduction currently in force |
| TBAR | Quarterly for ALL SMSFs since 1 July 2023; due 28 days after quarter end |
| LRBA safe harbour rate (PCG 2016/5) | 2026-27: 9.35% real property (2025-26: 8.95%); 11.35% listed securities (property rate + 2%) |
| Division 296 | First year 2026-27; extra 15% ($3m-$10m proportion) / 25% (>$10m); member-levied; FLAG, never compute |
| ASIC special purpose trustee company review fee | $70/year from 1 July 2026 |
| Contributor | Open Accountants |

**Conservative defaults**

**Conservative defaults**

| Ambiguity | Default |
| --- | --- |
| Unknown ECPI method | Assume proportionate -- actuarial certificate REQUIRED before claiming |
| Unknown whether minimum pension paid | Do NOT claim ECPI until payments verified against SIS Reg Sch 7 minimum |
| Unknown member TSB | Assume caps/bring-forward/carry-forward unavailable; ask for TSB at 30 June 2026 |
| Related-party transaction in the file | Escalate -- s 65 / s 66 / Part 8 / NALI screen before classifying |
| Unknown asset valuation support | Flag audit risk -- market value at 30 June required (SIS Reg 8.02B) |
| Contribution credited near 30 June | Date RECEIVED by the fund governs the year and the cap |
| Unknown auditor appointment date | Check the 45-day rule now -- late appointment jeopardises lodgment |
| Unknown member age | Ask -- age drives acceptance rules AND pension minimums |
| Payment to a member with no documented condition of release | Treat as potential illegal early access; escalate (never classify as a benefit) |

## Section 2 -- Required inputs and refusal catalogue

### Required inputs

**Minimum viable** -- trust deed and member list, trustee type (individual vs corporate), member ages and account phases (accumulation / retirement), trial balance or bank statements, prior-year SAR, and each member's TSB at 30 June 2026.

**Recommended** -- actuarial certificate (if proportionate), 30 June market valuations with evidence, contribution and pension payment schedules per member, TBAR lodgment history, LRBA loan agreement and amortisation schedule, investment strategy with last review date.

**Ideal** -- signed trustee declarations (NAT 71089), audit workpapers and prior auditor management letters, deed history including pension documentation, lease agreements for any related-party tenancy, insurance policy schedule.

### Refusal catalogue

- **R-AU-SF-1 -- Financial product / investment advice (AFSL boundary)** — *Trigger:* asked to recommend investments, whether to start/commute a pension, how much to contribute, or whether an SMSF suits the client. *Message:* "That is personal financial product advice requiring an Australian Financial Services Licence (the accountants' exemption ended 1 July 2016). I can handle SMSF accounting, tax and compliance only. Refer to a licensed financial adviser." HARD refusal -- no exceptions.
- **R-AU-SF-2 -- In-specie contribution / off-market transfer valuations** — *Trigger:* asked to set the value of an asset contributed or transferred in-specie. *Message:* "Contribution value must be market value with qualified valuation evidence; s 66 acquisition rules also apply. Obtain an independent valuation and escalate."
- **R-AU-SF-3 -- LRBA structuring** — *Trigger:* asked to establish a bare/holding trust, draft loan terms, or design a related-party LRBA. *Message:* "LRBA establishment is legal and financial advice. I can classify payments on an EXISTING documented LRBA and check the PCG 2016/5 safe harbour only. Escalate."
- **R-AU-SF-4 -- Related-party acquisitions** — *Trigger:* proposed purchase from / lease to a member or related party. *Message:* "s 66 prohibits most related-party acquisitions (exceptions: listed securities and business real property at market value, within in-house limits). Transaction design must be escalated before any step is taken."
- **R-AU-SF-5 -- Early-access schemes** — *Trigger:* any request to pay benefits without a documented condition of release, or to 'temporarily borrow' fund money. *Message:* "Illegal early access -- taxed at marginal rates plus penalties, trustee disqualification, potential fund non-compliance (45% on assets), and promoter penalties. Refuse and warn; compassionate release runs through the ATO only."
- **R-AU-SF-6 -- Wind-ups** — *Trigger:* asked to wind up a fund. *Message:* "Wind-up sequencing (benefit payments/rollovers, final audit, final SAR with levy adjustment, deregistration) is judgment work with irreversible steps. Escalate to a qualified practitioner."
- **R-AU-SF-7 -- Death benefit disputes / BDBNs** — *Trigger:* death benefit payment directions, binding death benefit nomination validity, or competing claims. *Message:* "Legal advice. Escalate to an estate/superannuation lawyer."

## Section 3 -- Fund structure and registration

### 3.1 Definition of an SMSF (SIS Act s 17A)

- **Maximum members** — Maximum 6 members (up from 4 on 1 July 2021).  _(SIS Act s 17A)_
- **Individual trustees** — Individual trustees: every member is a trustee and every trustee is a member. Single-member fund: 2 individual trustees (the member + 1 other).  _(SIS Act s 17A)_
- **Corporate trustee** — Corporate trustee: every member is a director and every director is a member. Single-member fund: sole director, or member + 1 other director.  _(SIS Act s 17A)_
- **Employee of another member** — No member may be the employee of another member unless they are relatives.  _(SIS Act s 17A)_
- **Remuneration** — Trustees/directors must not be remunerated for trustee duties (arm's-length professional services in another capacity are permitted, s 17B).  _(SIS Act s 17B)_
- **Disqualified persons** — Disqualified persons (s 120: undischarged bankrupts, dishonesty convictions, civil penalty orders) can never act -- check the ATO disqualified trustees register at onboarding.  _(SIS Act s 120)_
- **Minors / lacking capacity** — Minors and members lacking capacity act through a legal personal representative or parent/guardian (s 17A(3)); an enduring power of attorney can stand in for a member.  _(SIS Act s 17A(3))_

### 3.2 Individual vs corporate trustee

**Individual vs corporate trustee**

| Factor | Individual trustees | Corporate trustee |
| --- | --- | --- |
| Ongoing cost | Nil | ASIC annual review fee $70 (special purpose company, from 1 July 2026) |
| Membership change | Retitle EVERY asset | Company remains owner; update directors |
| s 166 administrative penalties | Levied on EACH trustee personally | Levied ONCE on the company |
| Single-member fund | Needs a second person | Sole director permitted |
| Succession on death/incapacity | Fund structure breaks; 6-month fix window (s 17A(4)) | Continuity via directorship |

At the 2026-27 penalty unit of $364, a 60-penalty-unit breach (lending, borrowing, in-house assets) costs $21,840 -- **per individual trustee** ($43,680 for a couple) but once for a corporate trustee. Flag this when a new fund file shows individual trustees.

### 3.3 Registration checklist (new fund)

1. Execute trust deed, appoint trustees, hold initial assets (fund is not legally established until it holds assets).
2. Each trustee/director signs the **ATO trustee declaration (NAT 71089)** within 21 days of appointment; retain 10 years.
3. Register with the ATO within 60 days: **TFN + ABN**, electing regulation under SIS s 19 (irrevocable).
4. Open a fund bank account in the fund/trustee name (asset separation, SIS Reg 4.09A).
5. Obtain an **ESA (electronic service address)** -- required for SuperStream employer contributions (critical under payday super) and for ALL rollovers in/out (SuperStream v3).
6. Prepare the investment strategy (SIS Reg 4.09) BEFORE investing.
7. First-year fund with no assets: request cancellation or 'return not necessary' -- otherwise the SAR is due.

## Section 4 -- Fund taxation (ITAA 1997 Div 295)

### 4.1 Rate structure

**Rate structure**

| Income class | Rate | Notes |
| --- | --- | --- |

From openaccountants/openaccountants, AGPL-3.0.

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