Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 265

Latest SMSF updates from the ATO

The new financial year brings a major update from the Australian Taxation Office for SMSF trustees. Below are some of the ATO's recently-published SMSF news and alerts.

Illegal early release of super

The ATO recently issued a media release warning the public about promoters encouraging people to illegally access their super early.

Illegal schemes will cost members a lot more than the super they access and may get them into trouble.

As an SMSF trustee, you must ensure that the member has met a condition of release before you release any funds. There are severe consequences for you and your fund if you access your super before you are legally entitled to do so.

These could include:

  • the disqualification of trustees
  • the fund being made non-complying
  • an imposition of administrative penalties

If any of your SMSF members have been involved in a scheme, contact the ATO immediately.

Is establishing an SMSF right for you?

Practical tips for individuals considering starting up an SMSF, based on the recently published Australian Securities and Investments Commission (ASIC) report - Improving the quality of advice and member experiences.

The Australian Securities and Investments Commission (ASIC) have completed their review into the quality of advice in setting up and running a self-managed superannuation fund (SMSF). The report identifies a number of practical tips that advice providers can use to improve the quality of SMSF advice provided to individuals.

The report also identified that a small proportion of newly established SMSF trustees do not properly understand what it means to set up and run an SMSF, and that an SMSF is not for everyone.

Running an SMSF comes with many obligations and responsibilities and requires you to have the both the time and skills to manage the SMSF in order to have a financially successful outcome. As a trustee of the SMSF, you'll be responsible for operating your fund within the law. If you don't manage your SMSF within the law, you may face penalties and your fund may suffer tax consequences. While mistakes can happen, and the ATO will work with trustees to get their SMSF back on track, they do take regulation of the SMSF sector seriously and will take appropriate compliance action where warranted.

You'll be responsible for the investment decisions of the SMSF, including formulating an investment strategy that should be reviewed regularly. You'll need to understand the restrictions on the investments an SMSF can make, for example, that your SMSF cannot purchase a property for you or a member of your family to live in.

There are set-up and ongoing costs when running an SMSF. For every year that the SMSF is operating you will need to pay for an independent audit and the supervisory levy.

You are also likely to have costs associated with:

  • preparing the SMSF annual return
  • valuations of the SMSF's assets
  • for some SMSFs, actuarial certificates for paying superannuation income streams (pensions)
  • financial advice
  • legal fees, for example, if the trust deed needs to be amended
  • assistance with fund administration
  • insurance for members.

When considering whether to set up an SMSF you should also consider:

  • compensation is not available to trustees where the SMSF make a loss due to fraud or theft
  • SMSFs members cannot take complaints to the Superannuation Complaints Tribunal
  • running an SMSF can be time consuming and requires a number of different skills
  • how your SMSF will be managed in respect of major life events such as marriage, divorce, and death.

The ATO's web content and online education courses can provide assistance to individuals thinking of setting up an SMSF. They will also work with you, as a trustee, to help you with your situation whether you want to wind up your SMSF or want to make a voluntary disclosure if you have contravened the superannuation laws.

SMSFs are a great way to take control of your superannuation, but you should consider whether they suit your needs and skills first and will meet your retirement goals. You should strongly consider consulting an independent qualified, licensed professional before you make the decision to establish an SMSF.

SMSFs and one-stop property shops

Individuals and current trustees are strongly encouraged to seek independent professional advice from a licensed adviser before establishing an SMSF and before undertaking any new investments.

ASIC has completed their review into the quality of advice in setting up and running a self-managed superannuation fund (SMSF). A key concern of ASIC’s report was in relation to the establishment of SMSFs for property investments using 'one-stop shop' models.

One-stop shop models tend to promote the purchase of geared residential property through an SMSF, arranged by groups of related real estate agents, developers, mortgage brokers, accountants and financial advisers.

The one-stop shop model creates inherent conflicts of interest that may affect the advice given to a client to set up an SMSF. For example, some of these businesses take advantage of customers with limited or no knowledge of SMSFs or super and have the potential to cause major financial detriment to an individual’s financial savings, including:

  • being given inappropriate or misleading advice to set up an SMSF which may result in members being financially worse off
  • the advice provider may not adequately consider or explain the obligations of being an SMSF trustee
  • members may be encouraged into a property purchase at an inflated value, or unaware of undisclosed high commissions.

The ATO strongly encourages individuals to seek independent professional advice from a licensed adviser before establishing an SMSF and before undertaking any new investment in an SMSF.

Where a mistake occurs, SMSF trustees are also encouraged to consider making a voluntary disclosure using the SMSF early engagement and voluntary disclosure service. In these instances The ATO will work with trustees to help get their SMSF or super back on track where possible.

SMSF checklists

Make sure you haven't missed anything - here is a range of checklists for each stage that your fund moves through.

Superannuation: the journey continues

With the end of financial year and the due date for new reporting obligations nearing, it's important for trustees and SMSF professionals to know what they need to report, and what they should look out for.

ATO Deputy Commissioner James O'Halloran chats to John Maroney, CEO of the SMSF Association ahead of the new financial year.

Listen to the latest episode for more.

Please note this content is extracted from ATO publications to share their views and has not been edited or written by Cuffelinks.

RELATED ARTICLES

Navigating SMSF property compliance

Clime time: Asset allocation decisions for SMSFs

SMSF trustees who question their capacity and look for options

banner

Most viewed in recent weeks

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

Latest Updates

Investment strategies

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Investment strategies

Don't let Trump derail your wealth creation plans

If you want to build wealth over the long-term, trying to guess the stock market's next move is generally a bad idea. In a month where this might be more tempting than ever, here is what you should focus on instead.

Economics

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Investment strategies

Will China's EV boom end in tears?

China's EV dominance is reshaping global auto markets - but with soaring tariffs, overcapacity, and rising scrutiny, the industry’s meteoric rise may face a turbulent road ahead. Can China maintain its lead - or will it stall?

Investment strategies

REITs: a haven in a Trumpian world?

Equity markets have been lashed by Trump's tariff policies, yet REITs have outperformed. Not only are they largely unaffected by tariffs, but they offer a unique combination of growth, sound fundamentals, and value.

Shares

Why Europe is back on the global investor map

European equities are surging ahead of the U.S this year, driven by strong earnings, undervaluation, and fiscal stimulus. With quality founder-led firms and a strengthening Euro, Europe may be the next global investment hotspot.

Chalmers' disingenuous budget claims

The Treasurer often touts a $207 billion improvement in Australia's financial position. A deeper look at the numbers reveals something less impressive, caused far more by commodity price surprises than policy.

Fixed interest

Duration: Friend or foe in a defensive allocation?

Duration is back. After years in the doghouse, shifting markets and higher yields are restoring its role as a reliable diversifier and income source - offering defensive strength in today’s uncertain environment.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.