SMSF and Tax

Self managed super fund tax: what trustees need to know

When you set up a self-managed super fund (SMSF), one of the first questions many trustees ask is: do self managed super funds pay tax​? After all, most of us are used to doing our personal tax return each year, but an SMSF is its own separate entity. That means the rules, timing and processes can look quite different from what you’re used to.

In this guide, we’ll walk through the key points every trustee should know: how SMSF tax differs from personal tax, lodgement timelines, why refunds are less common, the role of annual audits, and when your SMSF details might be needed for your own return.

SMSFs vs personal tax

Your SMSF and your personal finances are legally separate. This means:

• Your SMSF lodges its own tax return each year, separate from your personal return.

• The SMSF tax return covers the fund’s income, expenses, contributions and investment activity.

• The tax rate for SMSFs is generally 15% on income, which is often lower than most personal tax rates (ATO).

For many first-time trustees, it’s a surprise to learn that your SMSF tax return has no direct impact on when you lodge your personal tax return. Unless you’ve made additional contributions or accessed your super early by satisfying a condition of release, the two processes usually run on their own timelines.

Self managed super fund tax​ lodgement dates explained

Another key difference is timing. SMSF tax returns don’t line up with the same deadlines as personal tax returns.

• If you lodge your personal tax return through an accountant, it’s often due by 31 October unless extensions apply.

• In contrast, an SMSF tax return is usually due later – most funds have deadlines around 28 February of the following year, and in some cases as late as 15 May.

Why the extra time? 

Because SMSFs often hold investments like property, shares or managed funds, which need to be valued and finalised as at 30 June and often audited themselves. The return also can’t be lodged until the fund has been independently audited.

This means your SMSF administrator will work with you to gather documents and ensure everything is ready in time. It’s not unusual for first-time trustees to find the pace a little different to personal tax – but once you understand the process, it feels more straightforward.

Why SMSF tax refunds are rare

With personal tax returns, many people are used to getting a refund. For SMSFs, this isn’t as common.

That’s because in the first year of your SMSF, no tax is pre-paid through the PAYG (Pay As You Go) system. And in later years, the amounts pre-paid are usually limited. So even if the fund has a small tax bill, there’s often nothing that needs to be refunded.

Instead, the focus is on making sure contributions and earnings are taxed at the correct 15% rate. This often feels unusual for first-time trustees, but it’s perfectly normal within the SMSF framework.

Annual audit requirements

One of the biggest differences between personal tax and SMSF tax is the requirement for an annual independent audit.

Every SMSF tax return must be audited by a registered SMSF auditor each year. This is a requirement set by the Australian Taxation Office (ATO), and it’s designed to give trustees and regulators confidence that funds are being managed correctly.

For many trustees, this is another area where professional support is invaluable. Instead of finding and managing an auditor yourself, your SMSF administrator can organise this for you as part of the annual process.

When SMSF information affects your personal tax return

In most cases, your SMSF return and your personal return are completely separate. But there are a few situations where information from your SMSF will be relevant to your personal tax:

• Personal contributions – If you’ve made extra contributions and plan to claim them as a deduction, you’ll need your SMSF to lodge a Notice of Intent form first.

• Early release of super – If you accessed your super early by meeting a condition of release, as set out by the ATO, this will also need to be reported in your personal return. 

  
  

The ATO allows early release in limited circumstances, which may include:

• Compassionate grounds (must apply through the ATO)

• Severe financial hardship

• Terminal medical condition

• Temporary or permanent incapacity

• First Home Super Saver Scheme (FHSSS)

• Departing Australia (for temporary residents only)

• Rollovers – If you’ve rolled money in or out of your SMSF during the year, you may need to coordinate with your accountant to make sure the details match.

While these cases are less common, they’re important to get right. It’s another reminder of why clear communication between you, your SMSF administrator and your personal accountant is so valuable.

Keeping self managed super fund tax simple

For many trustees, the idea of managing both a personal and an SMSF tax return can feel overwhelming at first. But once you understand that your fund is its own entity – with its own tax return, deadlines and audit – it starts to make more sense.

The key is to keep good records, work with your SMSF administrator, and understand the few situations where SMSF activity may flow through to your personal tax.

How Andromedae can help

At Andromedae, we make SMSF administration clear and stress-free. From preparing your annual return and arranging your audit, to guiding you through what information is needed and when, we take care of the details so you can focus on your future.

If you’re looking for support managing your SMSF tax and compliance, get in touch with us today. 

Disclaimer: Andromedae and its staff do not provide financial advice on whether an SMSF is right for you. We also do not provide advice on what investments your SMSF should undertake. Our role is to manage the administration and compliance of your SMSF. Please seek advice from your own financial professionals to determine what is best for your personal circumstances. All content in this blog is provided as general information only.