Category: Industry Update

SMSF Death Benefit Checklist

Introduction:

When a member of an SMSF dies a death benefit may become payable to dependents. Also, if the deceased was an individual trustee or director of the corporate trustee a replacement may be required to ensure the fund can continue to operate and benefits are paid.

Here are some questions which may assist to ensure the correct documents are in place and decisions have been made to support the death benefit payment and the replacement of the trustee.

Depending on the client’s situation and the trust deed, there may be many more questions in addition to those below.

Notification of the Member’s death

  1. Has the trustee been notified of the death of a member or trustee?
  2. Has the trustee received a copy of the death certificate of the deceased or other official recognition of the death of the member or trustee?

Trust deed provisions

Do the governing rules of the fund, such as the fund’s trust deed, have any special requirements in relation to the death of the member or trustee?

Do the governing rules require replacement of the deceased member/trustee or member/director of the corporate trustee with the deceased’s legal personal representative (LPR) before a decision can be made about the payment of the deceased member’s death benefit?

Trustees

  1. Did the fund consist of a single member and a corporate trustee where the single member was the sole director of a corporate trustee?
  2. Did the fund have a corporate trustee and two directors who died simultaneously?
  3. Does the fund have one trustee or director of the corporate trustee who is living?
  4. If the sole director or the directors of a corporate trustee has died the company constitution may provide instructions on how the director is replaced.
  5. Did the deceased have a last will and testament which appointed an executor of their estate who can act as their legal personal representative (LPR)?
  6. If there is no will or LPR, have dependants or those who consider they have a claim to the superannuation of the deceased applied to the court for letters of administration. Has the Court granted letters of administration or is it in progress?

Death benefit powers of attorney and nominations

  1. Did the deceased grant an enduring power of attorney to a person or persons who are acting as the LPR of the deceased?
  2. Did the deceased make a death benefit nomination prior to their death?
  3. Is the death benefit nomination valid in terms of the fund’s governing rules and the law?
  4. Was the death benefit nomination binding or non-binding on the trustee?
  5. If the death benefit nomination is binding, the trustee is obliged to distribute benefits as instructed by the deceased.
  6. If the death benefit nomination was non-binding the trustee may use discretion to distribute benefits as provided in the nomination. However, they are not obliged to distribute benefits as provided in the non-binding nomination.

Payment of death benefit lump sums and pensions

  1. Have dependants of the deceased as at the date of the member’s death been identified for purposes of the SIS Act and Regulations?
  2. Was the deceased in receipt of a pension at the time of their death which provided a reversion to a dependant?
  3. Did the deceased make a valid reversionary pension nomination in accordance with the governing rules of the fund?
  4. Has the trustee made a decision concerning the distribution of death benefits to the dependants of the deceased or to their estate via their LPR?
  5. Are the member’s death benefits required to be paid as lump sums or pensions?
  6. Has more than an interim and final payment been made to the dependant as a lump sum?
  7. Was a pension payable to the surviving spouse if the deceased and surviving spouse were both under age 60 at the time of the member’s death? If so, tax is payable on taxable component of the pension until the surviving spouse is age 60.
  8. If pensions were payable to children of the deceased who are under 18 has the child’s LPR or guardian been identified to receive the payment on the child’s behalf?
  9. Have lump sums payable to the executor of the member’s estate been distributed in accordance with the will of the deceased?

Have trustee minutes and resolutions been made concerning the member’s death, appointment of trustee and payment of benefits to dependants or the member’s estate?

Has the trustee received confirmation of receipt of death benefit or commencement of a death benefit pension by the dependant and/or the estate of the deceased, as relevant?

Have the trustees notified the ATO concerning the amount of tax to be paid in respect of the taxable component of any death benefit lump sum paid to persons who are not death benefit dependants, for example, adult children of the deceased?

Cloudoffis makes preparation, approvals and compliance easy with AI-powered workpapers. As Australia’s leading SaaS provider in the SMSF industry, we bring over 9 years of unparalleled experience.

Pioneers in our field, we take pride in supporting the accounting and auditing community to streamline their workflows and work more efficiently through SMSF Sorted, SMSF Auditomation and Tax Sorted.

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Graeme’s Super News - October Edition

Read the latest updates from Graeme Colley, a respected educator, policy advisor, and technical expert with over 30 years' experience in taxation and superannuation.

Graeme’s Super News – October Edition

Read the latest updates from Graeme Colley, a respected educator, policy advisor, and technical expert with over 30 years’ experience in taxation and superannuation.

Update on Division 296

Division 296 amends the income tax law to introduce an additional tax of up to 15% on the increase in a person’s Total Superannuation Balance for the year on balances above $3 million. It was intended to take effect from 1 July 2025.

Based on recent media reports the government has paused progression of the tax. If the legislation does make it into to parliament it may not be in the same form as the original bill which lapsed on 21 July 2025. It may be better to wait until we see whether the legislation will go ahead and, if it does, whether any changes are made to the lapsed bills.

It is rumoured that the $3 million threshold may be indexed which may relieve one of the main issues with the legislation. However, the member’s total superannuation balance which is used to determine the threshold may still include unrealised capital gains in the calculation.

At the moment it’s just wait and see what the government proposes to do.

Amendments to superannuation contributions ruling finalised

Taxation Ruling TR 2010/1 Income tax: superannuation contributions has been amended by TR 2010/1A4 to provide the ATO’s view of the link between the non-arm’s length income provisions in section 295-550 of the ITAA ’97 and superannuation contributions. The amendments are relevant for trustees of super funds, particularly SMSFs, in determining whether the non-arm’s length income rules apply when making in specie contributions.

The amendments to TR 2010/1 also cover value shifting arrangements to exclude those occurring from 28 November 2024. But it covers the ATO’s approach to arrangements entered into prior to that date in Appendix 2 of the Ruling.

In relation to determining whether personal contributions are deductible the amended ruling covers the removal of the maximum earnings test which has applied since 1 July 2017.

Amended non-arm’s length income/expenditure ruling finalised

Law Companion Ruling LCR 2021/2 has been amended by LCR 2021/2A3 to clarify how amendments to section 295-550 of the ITAA ‘97 operate in a scheme where the parties do not deal with each other at arm’s length. It applies where the trustee of small complying superannuation funds, such as an SMSF or SAF incurs non-arm’s length expenditure (or does not incur relevant expenditure) in gaining or producing the fund’s ordinary or statutory income.

The revised ruling provides clarity to a range of NALI/E issues including the difference between services provided as a trustee and in a professional capacity.

ATO SMSF Stats for the June Quarter 2025

The latest SMSF quarterly statistics as at June 2025 were released in early September and highlights the continued growth of SMSFs. The ATO statistics show that there are 653,062 SMSFs which have a total of 1,203,127 members.

During the 2024/25 financial year there was an increase of 38,449 funds, which was a substantial increase over each of the previous three years. Nearly two-thirds of the increase in SMSF memberships has come from the younger age groups. Although over 50% of members are in the 60+ age group.

SMSFs now hold over $1 trillion in assets with the largest asset classes being listed shares and cash and term deposits.

The ATO’s SMSF quarterly statistical reports is available from the ATO website at June 2025 ATO SMSF statistics

Government Audit Office Review of SMSFs

The Australian National Audit Office (ANAO), has listed an audit of the ATO’s regulation of SMSFs for the 2025/26 financial year as well as a follow up audit of employer compliance with Superannuation Guarantee. The ANAO last examined the ATO’s management of SMSFs in 2007, and Superannuation Guarantee non-compliance in 2022.

The review of employer compliance with the Superannuation Guarantee requirements, compliments the introduction of the payday super which is due to commence on 1 July 2026.

Cancellation of Auditor Contravention Reports

If you are an SMSF auditor, the ATO must be notified if a reportable contravention under the SIS Act has occurred, is occurring or may occur. The contravention is made by lodging an Auditor Contravention Report (ACR) within 28 days of completing the audit.

However, if the ACR was sent to the ATO because of a genuine error then it can be cancelled. Genuine errors include:

  • lodging under the wrong fund ABN
  • providing incorrect information about the contravention based on the evidence you had in your possession at the time of reporting the contravention to us.

If the information received after lodging the ACR shows that the reported contravention was incorrect, didn’t occur, or has been rectified, a revised ACR should be lodged with the ATO. This can be done by using the ATO’s Online services for business to request a cancellation. If the ATO considers there are valid reasons for cancellation it will reply within 28 days of the request.

Issues with accountants’ wholesale investor certificates

In late June 2025 the Australian Financial Complaints Authority (AFCA) handed down a decision Case number: 12-00-1080719 concerning an SMSF which had invested in Contracts for Difference (CFDs) on the basis that it was a wholesale investor for purposes of the Corporations Act 2001.

AFCA came to the conclusion that the SMSF was a retail client because the financial services provided by the financial firms involved related to a beneficial interest in the SMSF, which was a superannuation product, and the SMSF held less than $10 million in net assets as required under the Corporations Act 2001.

The decision in this case changed a longstanding understanding on the basis of an ASIC Media Release 14-191MR Statement on wholesale and retail investors and SMSFs | ASIC . It indicated that if a superannuation fund held less than $10 million in net assets that ASIC would no action if the advice provider determined that the trustee was a wholesale client based on the general net assets test of $2.5 million applying to the individual. As a general rule this was taken to assume that the SMSF could be treated as a wholesale client.

However, in its decision AFCA pointed out that the Media Release 14-191MR is not a definitive statement by ASIC that the general wholesale client test applies to SMSF trustees in relation to financial services these trustees receive. In effect, the release relates to ASIC not taking action in the circumstances indicated in the Media Release.

The AFCA decision was recently confirmed by their lead ombudsman, Shail Singh, and in the AFCA newsletter dated 19 June 2025 that the Corporations Act treats everyone as a retail investor unless you fall into a category of wholesale.

Qualified accountants who have been asked to provide wholesale investor certificate for purposes of Chapter 7 of the Corporations Act must understand when it can be given for an SMSF and that the net value of the fund’s assets are calculated correctly.



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ATO SMSF Stats for the June Quarter 2025

ATO SMSF Stats for the June Quarter 2025

The latest SMSF quarterly statistics as at June 2025 were released in early September and highlight the continued growth of SMSFs. The ATO statistics show that there are 653,062 SMSFs which have a total of 1,203,127 members.

During the 2024/25 financial year, there was an increase of 38,449 funds, which was a substantial increase over each of the previous three years. Nearly two-thirds of the increase in SMSF memberships has come from the younger age groups. Although over 50% of members are in the 60+ age group.

SMSFs now hold over $1 trillion in assets, with the largest asset classes being listed shares, cash and term deposits.

The ATO’s SMSF quarterly statistical reports is available from the ATO website at
June 2025 ATO SMSF statistics

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Graeme’s Super News - September Edition

Read the latest updates from Graeme Colley, a respected educator, policy advisor, and technical expert with over 30 years' experience in taxation and superannuation.

ATO Auditor Compliance Program results for 2024–25

The ATO completed over 200 SMSF auditor reviews during the 2024–25 financial year.  They referred 41 auditors to ASIC for not complying with the audit and assurance standards and 36 auditors cancelled their registration.  

The main compliance issues included not obtaining sufficient and appropriate audit evidence for the auditor to form an opinion on the fund’s financial statements and whether the audited fund complied with the super laws.  There was also a lack of evidence that fund transactions were at arm’s length and not reporting the fund assets at their market value.

 

Separation of assets

The super law requires fund trustees to keep money and other assets of the fund separate from those held by the trustees individually or by a standard employer-sponsor or their associates.  

The ATO considers the fund assets must be held in the name of the trustee ‘as trustee for’ the fund.  This may not be possible in some cases where the law requires an asset to be held in the name of the legal owners rather than as trustees for the relevant fund.  In these cases, the auditor has an obligation to ensure the fund assets are legally owned by the fund, held by the trustees beneficially on behalf of the fund and are separate from the trustees’ personal or business assets.

Legal ownership can be evidenced by a declaration or acknowledgement of trust executed by the trustee over the fund’s asset.  Where this type of documentation is not available the trustees should seek legal advice.

If the fund does not separate its assets and comply with SIS regulations it is a reportable contravention.  The auditor should notify the trustees in writing of the breach and also the ATO via the SMSF Independent Audit Report if the contravention is material.  Also, the breach should be reported in an Audit Contravention Report if the ATO’s reporting criteria is met. 

 

What happens when a pension ceases?

The ATO’s opinion on when a pension commences and ceases is published in Taxation Ruling 2013/5.  While it is relatively clear when a pension commences it may cease suddenly for tax purposes when certain events occur. 

As a general rule a pension commences when all the capital with the purpose of supporting the income stream has been set aside in the fund.  The commencement day of the pension is the first day of the period to which it relates.

In contrast, the tax ruling points out that a pension ceases when there is no member or beneficiary entitled to receive it.  Examples include when:

  • the pension has a $nil balance, 
  • it has been converted (commuted) in full to a lump sum,
  • a person in receipt of a pension dies, and no one is entitled to automatically receive it,
  • the amount of the pension paid is less than the amount required under the SIS Act orthe  Commissioner’s General Powers of Administration, or
  • a child in receipt of a death benefit pension reaches age 25.

What the ruling does not tell you is that if a client has exceeded their Transfer Balance Cap and has received an excess transfer balance determination problems can arise.  In this situation the client has a number of options which include:

  • not commuting the excess amount notified in the determination in full by the due date, or
  • making an election for the ATO to send a commutation authority to the fund and have the excess commuted in full or in part. 

Where the:

  • income stream was commuted before the notice was received,
  • pensioner has died, or
  • notice was issued in relation to a capped defined benefit income stream (CDBIS)

the ATO is required to be notified of the event. 

 

If a member’s super fund has not commuted the excess amount as notified in the ATO’s commutation authority within 60 days of the issue date then the pension stops being in retirement phase.  This means the pension is treated as ceasing from the commencement of the relevant financial year.  Any income earned on the assets that were supporting the pension are taxed as though they are part of the fund’s accumulation phase assets. Any pension payments made to the member in the financial year are treated as lump sums.

It is possible to commence a new pension from the start of the next financial year.  However, the calculation of the new pension will be treated as if it has commenced from the fund’s accumulation phase assets.  This may result in the taxable and tax-free amounts being different from the previous pension. 

Accountants and auditors of SMSFs will need to be on the lookout for retirement phase pensions where the aggregate commencement values could be in excess of the member’s Transfer Balance Cap.  In these situations, they could expect the pensioner has been notified by the ATO that there is an excess amount which needs to be commuted.  If the fund has received a commutation authority then the accountant or auditor needs to confirm that the commutation has been made within 60 days of the issue date.  If this has not occurred then the fund will not be able to claim an earnings tax exemption for the relevant income stream in the income year or possibly for any later income years.

 

Crypto currency fact sheet

The value of crypto assets in SMSFs as at March 2025 was $1.675 billion.  As crypto assets are a relatively new asset class and increasing in popularity there are some fundamental issues that trustees and their professional advisers must become familiar with.  This includes accounting for the asset, it’s location, storage, ownership and access to the asset which may provide a challenge.

Because of the fluid and intangible nature of crypto assets proof of the existence may depend on getting access to relevant email accounts, mobile phones and other devices.  These store important asset information or are used as part of two-factor authentication or multi-factor authentication. Relying on these devices as information and storage sources creates a risk for the fund as investor.  There’s also the issue of whether the crypto assets can be located, accessed and accounted for including whether successor trustees or corporate trustees in the long term have a legal right and practical control to recover the crypto assets. 

The ATO has released a Tax and crypto asset investments factsheet to assist professionals and their clients when preparing fund accounts.  It includes the records that need to be kept for crypto assets including income tax and CGT

 

 

 

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The Cloudoffis Bulletin - May Edition

Welcome to this month’s Cloudoffis Bulletin! We’ve held off sending this edition until after the 15th May deadline, so we hope you’re reading this with a well-deserved cup of coffee in hand and your feet up after the sprint to the finish line.

This month, we’re excited to share two new webinars for our SMSF audit and accounting customers, updates on new features across all our products, and the latest from Graeme Colley’s Super News column.

We look forward to catching up with many of you in the coming weeks.

Upcoming events

28th May, 12pm AEST 18th June, 2pm AEST
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In addition to our industry-leading products, we’re proud that client feedback has shaped Cloudoffis’ unique offerings, ensuring we provide the care and service necessary to keep your practice running smoothly:

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  • Simple Pricing. Full Access – No user caps. No hidden fees. Just straightforward pricing that scales with you.
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Product updates:


Graeme’s Super News

The May elections have passed and the EOFY year is upon us so we asked Graeme to reflect on some of the hottest topics such as Div 296, Pay Day Super and Financial Year End preparation.

Jump in to Graeme’s Super News from this month here and last month here.

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Graeme’s Super News – June

Division 296 – the $3 million super catch

With the May Federal election now out of the way, the first thing to raise its head was the previously announced change to increase the tax on super for anyone with a balance of more than $3 million. As the proposal is not law the sensible thing to do is wait until we see the final legislation before making a final decision.

In broad terms, the original proposal was intended to:

  • apply from 1 July 2025 on increases in a member’s adjusted total superannuation balance
    (TSB) where the balance at the end of the year is greater than $3 million,
  • levy a 15 per cent tax on the proportion of the growth in an individual's “superannuation
    earnings”, including unrealised capital gains,
  • not apply to reductions in the member’s TSB at the end of the financial year. Negative
    earnings above the $3 million cap are quarantined and used to offset future earnings in a
    later year of income, and
  • be levied directly on the member who has the option to elect that the tax is paid personally
    or paid from the balance in their superannuation fund.

The proposal has been criticised for a number of reasons. Two main concerns are:

  • the taxation of the ‘growth’ element in a member’s TSB over the year of income including
    the imposition of tax on unrealised capital gains on a year-by-year basis, and
  • the lack of indexation of the $3 million threshold.

It is difficult to predict when the impact of the proposed tax will become an issue as it depends on the final law when it is passed, the member’s circumstances, such as the amount they currently have in super, the investment performance of the fund and the level of super contributions made for the member.

Before alternative arrangements to superannuation are considered it may be worthwhile to take advantage of the current superannuation rules to reduce or possibly eliminate the effect of the proposed tax if it becomes law.

Payday Super – Wages and Super to be paid together

It is estimated that there is a significant short fall of about $5.2 billion in employers making SG contributions for their employees. This has led to the introduction of Payday Super which is due to start from 1 July 2026. Draft legislation was released by the government on 14 March for industry consultation and feedback.

SG contributions are required to be made at least each quarter, but the introduction of Payday Super will require that employers pay super contributions for employees within 7 days of paying their salary and wages. This is a much tighter regime as the current system allows employer contributions to be made up to 28 days after the end of each quarter. If Payday Super does commence on 1 July 2026 as proposed, employers should consider improving their systems and increase the frequency making SG contributions for employees. The legislation provides a transition period commencing from the time the legislation is passed to 1 July 2026 which is the commencement date for Payday super.

Employers are in a bind as they are faced with a choice of being early adopters and changing their systems in advance of the commencement day or waiting for the legislation to pass and adopting the start date set out in the law.

Anyone who engages an employee within the extended definition of the SG legislation should keep up-to-date with Payday Super developments and how they will meet the challenge of a new law.

Financial year end work – a last-minute reminder

It’s not long before the end of the financial year is here and clients and their advisers should be thinking about what needs to be done this financial year or wait until early in the next one. Of course, before 30 June this year minimum pension requirements must be met and any contributions are actually received by the fund’s bank account by 30 June.

Account based pensions

Anyone receiving an account-based pension must be paid at least the minimum amount which depends on their age and whether it commenced or ceased during the year. Remember, is not compulsory to pay the minimum amount of an account-based pension or TRIS for the financial year if it commences on or after 1 June.

Contributions

Super contributions must be received by the fund on or before 30 June 2025. Any contributions received after that time will count towards the 2025-26 year. This could result in excess contribution tax for that year if the concessional or non-concessional contribution thresholds are exceeded. If the contributions are made by the transfer of assets (in specie contributions) it is important to ensure they are valued at their market value as required by the ATO guidelines.

Tax deductions for GIC and SIC not available from 1 July 2025

Tax deductions for General Interest Charge and Shortfall Interest Charge have been removed from 1 July 2025 for any charges claimed. This may impact if either charge is imposed on:

  • Employers making late SG payments,
  • SMSFs with late or amended returns, and
  • Members incorrectly claiming deductions for super contributions.

The information in this article is intended to be general in nature and is not personal financial (or financial product) advice. It does not take into account the objectives, financial situation or needs of you or your client. Before acting on any information, you should consider the appropriateness of the information provided having regard to the objectives, financial situation and needs of you or your client.

In particular, you should seek independent professional advice prior to making any decision based on the information provided in this blog.

You should consider the appropriateness of this information having regard to the individual situation and seek taxation advice from a registered tax agent before making any decision based on the content of this blog.

Any examples and calculations within this blog are provided for illustrative purposes only. They should not be relied on. Viewing the content provided, is considered as acknowledgement,
acceptance and agreement to this Disclaimer and the contents contained within.

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Graeme’s Super News – May Edition

Financial year end work

With the end of the financial year fast approaching clients and their advisers should check to make sure the minimum pension requirements have been met and that any contributions have been received by the fund by 30 June.

Account based pensions

Make sure anyone receiving an account-based pension from the fund is paid at least the minimum amount which depends on their age. If the pension commenced after 1 July in this financial year the minimum amount is pro-rated on a daily basis it commenced. It is not compulsory to pay the minimum amount for the financial year if it commences on or after 1 June.

Remember that anyone who stops receiving a pension during the year must receive a pro-rated minimum pension calculated on a daily basis up to the time it ceases.

Contributions

It’s important that super contributions are received by the fund on or before 30 June 2025. Any contributions received after that time will count towards the 2025-26 year. This could result in excess contribution tax for that year if the concessional or non-concessional contribution thresholds are exceeded.

If the contributions are made by the transfer of assets (in specie contributions) it is important to ensure they are valued at their market value as required by the ATO guidelines.

Tax deductions for GIC and SIC not available from 1 July 2025

Tax deductions for General Interest Charge and Shortfall Interest Charge have been removed from 1 July 2025 for any charges claimed. This may impact if either charge is imposed on:

  • Employers making late SG payments,
  • SMSFs with late or amended returns, and
  • Members incorrectly claiming deductions for super contributions.

Changes to the Auditor Contravention Report

The ATO has made amendments to the ACR which relate to:

  • The auditor’s exercise of professional judgement which has been updated to clarify when auditors can exercise their professional judgement and whether an ACR is required for market value contraventions for assets held by service organisations.
  • Test 4 where breaches have occurred in one year but have not been corrected Example, section 66 breaches are only required to be reported in the year in which the breach occurred and not in subsequent years.
  • Section E – contraventions which are only required to be reported once compared to those that are ongoing and are required to be reported in subsequent years.

ATO Audit Compliance Focus for 2025

The ATO auditor compliance focus for 2025 will concentrate on:

Market Valuations

  • Insufficient evidence to support the market value of the fund’s assets
  • ATO contacted funds where there is no or little change in value over several years

High Volume audits

  • Auditors who audit at least 1000 audits each year or a sudden increase in the number of funds audited

Disqualified trustees

  • Trustees continue to act while disqualified

High Risk Auditors

  • Referrals to ASIC when not complying with fund audit requirements

Independence

  • Undertaking in-house audits, back-to-back audit arrangements, long associations with clients and concentration of audits from a single referral source.
  • Not meeting Code of Ethics requirements with APES 110

The 2025-26 Federal Budget

The Budget had no new announcements on superannuation except to reconfirm the payment of superannuation from 1 July 2025 on paid parental leave.

Any further changes to super will depend on the outcome of the Federal Election and the priorities of the new parliament.

The information in this article is intended to be general in nature and is not personal financial (or financial product) advice. It does not take into account the objectives, financial situation or needs of you or your client. Before acting on any information, you should consider the appropriateness of the information provided having regard to the objectives, financial situation and needs of you or your client.

In particular, you should seek independent professional advice prior to making any decision based on the information provided in this blog.

You should consider the appropriateness of this information having regard to the individual situation and seek taxation advice from a registered tax agent before making any decision based on the content of this blog.

Any examples and calculations within this blog are provided for illustrative purposes only. They should not be relied on. Viewing the content provided, is considered as acknowledgement, acceptance and agreement to this Disclaimer and the contents contained within.

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The Cloudoffis Bulletin - March Edition

Welcome to our first bulletin of the year! 2025 is already in full swing, and we’re excited about what’s ahead.
Welcome to our first bulletin of the year! 2025 is already in full swing, and we’re excited about what’s ahead.

We’ve been busy hosting events, launching new features, and connecting with our customers – and there’s plenty more to come from Cloudoffis in 2025.

Read on for all the latest updates!

Tax Sorted – now live!

Did you know Cloudoffis has expanded beyond SMSF?

Tax Sorted is our new tax workpaper product, designed to help accountants standardise business and individual workpapers, driving efficiency and giving more control back to practices nationwide.

Curious to see it in action?

Below are just two of the many game-changing features accountants are loving!

Workpapers powered by

Cloudoffis AI

This 60-second video highlights how Tax Sorted automatically imports data into 50+ fields of the BAS workpaper, eliminating time-consuming data entry.


Tax Sorted and FYI Docs

FYI Docs integrates securely with Tax Sorted, enabling seamless document flow between both platforms. Easily load documents from FYI Docs into Tax Sorted and save final workpapers back into FYI Docs, ensuring document integrity and a smoother workflow.

Request a Demo

We’re thrilled to announce that Tax Sorted took home first prize in the Tech Pitch Competition!

Our Head of Sales, Kresant, went head-to-head with 16 other accounting tech products and came out on top. The judges were particularly excited about how Tax Sorted tackles major challenges for accountants by delivering efficiency, standardisation and control and loved the AI-powered features built into our workpaper solution.

Want to see what all the hype is about? Request a demo today!

Refer a friend – Get $500!

Refer another business or even another department within your own company to Cloudoffis, and you’ll receive a $500 account credit when they sign up!

Here’s how it works:

  • Refer a peer in your accounting or audit network
  • If they sign up, your company receives a $500 credit
  • The offer applies to all Cloudoffis audit and accounting products – SMSF Sorted, Tax Sorted or Auditomation.

Know someone who could benefit from greater efficiency, standardisation, and a more compliant workflow? Refer them today and start saving!

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What our customers are saying!

“Cloudoffis is undoubtedly one of the best SMSF admin platforms on the market! Its powerful workpaper system enables instant document referencing, streamlines end-of-year preparation, and eliminates wasteful workarounds. We especially love features like AI Run, Dashboard, and Observation, which enhance efficiency and accuracy. Plus, the regular training sessions ensure our team stays up to date with the latest features – keeping us ahead of the game!”

Pearly Li S Yap, Assistant Manager

Ask Graeme webinar

A big thank you to everyone who attended our February Ask Graeme webinar! As always, Graeme Colley, our Independent Industry Advisor, provided valuable insights into the challenges accountants and auditors face daily.

Missed it? No worries! Watch the recording and read the blog summary.

Due to overwhelming demand, we’ll be hosting another webinar soon, so stay tuned! And don’t forget to check out Graeme’s Super News below for more industry updates.

Sydney roundtable: Auditors leaders breakfast

A huge thank you to our incredible Sydney auditing community for joining us at the Cloudoffis Leaders Breakfast earlier this month.

Hosted by Dilnar Tangri and Graeme Colley, with expert insights from Matina Moffitt from BDO, Tony Negline from Chartered Accountants Australia and NZ, and Tracey Besters from mySMSFjourney, the room was buzzing with discussion.

From the Grattan Institute report and the latest ATO speech at the SMSF conference to the critical role of peer reviews, there was no topic off the table.

A special shoutout to our esteemed guests, Larry, Jason, Philip, Peter, and Geoff, for your valuable contributions to the conversation. Events like these wouldn’t be the same without you!

Stay tuned for more Cloudoffis events coming soon!

Graeme’s Super news

We asked Graeme Colley to bring us up to speed on the latest in superannuation.

This month’s update covers:

  • Lifetime pensions – what’s changed?
  • The proposed $3 million super balance tax
  • Transfer Balance Cap increase
  • A review of NALI tax rulings

Plans to merge accounting and assurance standards bodies

Read the full article here

Product updates

Have you seen the Tax Sorted review summary?

Designed for improved efficiency and simplified workflows, the Tax Sorted Review Summary includes a Financial Summary with a 5-year trend analysis and enhanced Review Notes for seamless collaboration between preparers and reviewers.

Want more?

  • Track Workpaper progress, download files, and update job status.
  • Reply to timestamped review notes in organised threads.
  • Categorise review notes with predefined labels for quick navigation.
  • Notify team members, track progress with Open/Closed statuses, and ensure clear resolution.

Book a Demo

Observation tolerance in SMSF Sorted Pro & Auditomation

We’ve made it easier to manage observations in Sorted Pro and Auditomation!

Previously, minor discrepancies—like rounding differences in market values and incomes—were automatically flagged under Warnings, requiring manual review. But not anymore!

Now, you can set a tolerance level at the company level, allowing small variances to be automatically marked as Good To Go, eliminating unnecessary manual work. New info icons provide instant context too, simply hover over an observation to see its basis, ensuring quick and informed decision-making.

Auto-Tagging & New Rreports in SMSF Sorted

We’re making reviews faster and easier with new reports and auto-tagging for Annual Return schedules!

New reports in the reports section:

  • Unrealised Capital Gains Report
  • Member Transaction Detail Report

Auto-Tagging for annual return schedules

Annual Return schedules will now be automatically linked to the Income Tax Line Item in the following reports, reducing manual work and improving efficiency:

  • Annual Return – SMSF
  • Annual Return CGT Schedule – SMSF
  • Annual Return Losses Schedule – SMSF
  • Annual Return Trust Income Schedule – SMSF

Auditomation: Tip of the month

Did you know that in Auditomation, you have full control over the notifications you receive? You can customize your settings to choose which email and portal notifications you’d like to enable or disable.

Simply head to “Preferences” under your profile to tailor your notifications to suit your workflow. Stay informed without the clutter!

If you have any questions or need more information, feel free to reach out to Jocelyn, your Account Manager, at jocelyn@cloudoffis.com.au, and schedule a meeting. She’ll be happy to help!

Security & Compliance: ISO Certified

If your practice is looking to upgrade its tech systems with better security, Cloudoffis has you covered.

We’re proud to be ISO 27001 certified, ensuring the highest standards in data security and compliance. Plus, all our products include built-in tools to help keep your end-to-end processes secure and in check.

Find out more about how Cloudoffis securely manages your data.

That’s a wrap for this month! Stay tuned for more exciting updates, and as always, reach out if you have any questions or want to learn more about our latest features.

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Februaury 2025 Ask Graeme Webinar

On the 26th February 2024 we hosted our first Ask Graeme Q&A webinar with SMSF industry expert Graeme Colley. Graeme fielded questions on Div296, death benefits, and many other topics. To view the recording or read the Q&A, see below.

Question

To reduce member exposure to Div 296 tax some SMSF trustees have suggested that they would like
to post all revaluation increases to an investment reserve.

This is rather than allocating the unrealised increase in market values of currently held assets directly to member accounts at every year end.

The actual increase in an asset’s value is later allocated to member accounts only when the asset is actually sold and the SMSF is able to supply sufficient funds to pay the Div 296 tax at that later point instead.

Is this feasible or would this fall foul of existing ATO guidance?

Comments


In effect this is using tax effect accounting which makes provision for the potential Div 296 tax at a later point in time. As tax effect accounting relates to the tax payable by an entity and the liability for Div 296 tax is with the member of the fund it would appear that to make a provision in the fund’s accounts for future Div 296 tax is not available. The legislation provides that a member can refer the Div 296 tax liability to the fund for payment.

In relation to the use of investment reserves the ATO has published SMSF Regulators Bulletin SMSFRB 2018/1 on the uses of reserves in SMSFs. The ATO has a number of concerns which include
the use of reserves to manipulate a member’s balance in the fund. If the reserves are used for purposes of manipulating a person’s total superannuation balance then the ATO may take action as indicated in the Bulletin. Here is the link to the Bulletin.

Question

How will Div 296 work for SMSF asset valuations?

Comments


Asset valuations for purposes of Div 296 will be no different to the valuations used for the accounts of the SMSF. The reason is that the member’s Total Superannuation Balance is reported to the ATO at the end of the financial year and is used to calculate the member’s ‘superannuation earnings’ for the year and the calculation of the proportion of the member’s Total Superannuation Balance that lies above the $3 million threshold.

In relation to asset valuations, over the past year the ATO has had a project which identified 16,000 SMSFs with assets in property and unlisted trusts that where the fund had reported the same value for 3 or more consecutive years. Trustees and their advisers were asked by the ATO to make adjustments so that the assets were reported at their market value. When annual returns for the funds under review were lodged with the ATO 80% had adjusted the property values but only about 48% had adjusted the value of unlisted trust investments by SMSFs.

Question


Is a re-contribution strategy available for only 60-65 year-old range or up until age 75?

A re-contribution strategy is available up to 28 days after the month in which the member has reached age 75. In simple terms the member may withdraw an amount from their superannuation
account and recontribute non-concessional contributions back to their account or another member’s account in the fund, such as their spouse

A recontribution strategy is where a member:

• has an unpreserved benefit which can be paid to them from the fund, and

• part of all of the amount received is recontributed to superannuation as a non-concessional contribution.

Benefit of re-contribution strategy

• Reduction of the taxable component of a benefit mainly for estate planning purposes

• For Div 296 purposes it can reduce the member’s account and the amount recontributed will increase the account of the member’s spouse in the SMSF

A re-contribution strategy requires that a condition of a release of retirement is met to withdraw an
amount from super.

Conditions of release of retirement:

• Person is older than preservation age (currently age 60) and has ceased any gainful employment in which they were engaged between age 60 and 65,

• Person has retired from gainful employment between age 60 and 65, or

• Person is age 65 and over.

The amount received from the fund is made, wholly or in part, back to superannuation as a non- concessional contribution.

Question


If a super fund’s taxable income is calculated by not following tax law, and an accountant will not amend the financial statements, i.e. claiming ASIC fines as an allowable deduction, or treating property capital improvement items as deductible repair expenses, the financial statements can be qualified, but is there a SIS contravention? and is there a reportable SIS contravention? I have considered s65(1)(b) but have not used it.

Note: s65(1)(b)

I am not sure why reference has been made to s65(1)(b) as it relates to providing financial assistance to fund members or their relatives, as follows:

65(1) A trustee or an investment manager of a regulated superannuation fund must not:

(a)…..

(b) Give any other financial assistance using the resources of the fund to:

(i) a member of the fund; or

(ii) a relative of a member of the fund.

Comments:
When accounts are prepared for any entity, including an SMSF, they may be for different purposes. For example, for accounting purposes the net income of an SMSF may account for ASIC fines and treat capital items as expenses. However, when the accounts of the SMSF are being prepared for taxation purposes adjustments may be made to the accounting records to exclude those expenses which are not permitted as tax deductions.

For purposes of GS009, which is the AuASB’s Guidance Statement on Auditing SMSFs, clause 21 says:

21. The auditor is required under the SISA to:

(a) provide an auditor’s report on the SMSF’s operations for the year to the trustee in the approved form, no longer than 28 days after the trustee of the fund has provided all
documents relevant to the preparation of the report to the auditor; (b) report in writing to the trustee, if the auditor forms the opinion in the course of, or in connection with the performance of, the audit of the SMSF, that:

• (i) any contraventions of the SISA or SISR may have occurred, may be occurring or may occur in relation to the SMSF (section 129 of the SISA); or

• (ii) the financial position of the SMSF may be, or may be about to become, unsatisfactory (section 130 of the SISA);

Therefore, for purposes of the SISA or SISR the auditor is to report on the operations of the fund for the relevant financial year and whether there have been any contraventions of that legislation including the financial position of the fund. Therefore, the audit required does not include an audit of the fund’s income tax returns and whether an amount is assessable income or a tax-deductible expense.

Just to confirm that the Income Tax Assessment Act 1997 does not allow a tax deduction for fines or capital expenses. However, capital expenses may be added to the cost base of a CGT asset if permitted by the legislation. Here is what the ATO’s website says about fines and capital expenses:

No deduction for fines:

Section 26-5 of the Income Tax Assessment Act 1997 specifically makes penalties or fines imposed as a result of breaches of an Australian law non-deductible.

Deductions for capital expenses:

“You can claim a tax deduction for expenses relating to repairs, maintenance or replacement of machinery, tools or premises you use to produce business income, as long as the expenses
are not capital expenses.” ATO website Capital expenses can add to the cost base of a CGT asset.

Question

I have a client who turns 75 years old on 29 June 2025 and wishes to make the maximum non-concessional contributions to her SMSF before her cut-off date which is 28 July 2025.

Answer:

Age eligibility

For the 2022–23 and later financial years, if you're under 75 years of age at any time in a financial year, you're eligible to use the bring-forward arrangement in that financial year, subject to the age-related and other restrictions on the types of non-concessional contributions your fund may be able to accept.

If you're 75 years or older for all of the financial year, you're not eligible to use the bring-forward arrangement in that financial year.  Link to ATO website:

https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/non-concessional-contributions-cap

A person who is age 75 on 29 June 2025 may be able to access the 3 years bring forward rule in the 2024-25 financial year.  However, they could not access the bring forward rule in the 2025-26 financial year as they would not be under age 75 at any time in that year.

Therefore, if they wish to use the 3 years bring forward rule which allows a non-concessional contribution of $360,000, it would need to be accessed in the 2024-25 financial year, subject to the person's Total Super Balance on 30 June 2024 being less than $1.66 million.

If the person wished to contribute in the 2025-26 financial year up to 28 days after the month in which they turned age 75 (28 July 2025) they could only make non-concessional contributions of $120,000 for that year, subject to their Total Superannuation Balance being under $1.9 million on 30 June 2025.

Options:

non-concessional contributions 2024-25 financial year

non-concessional contributions 2025-26 financial year

To use the 3 year bring forward rule the Total Super Balance must be less than 

$1.66 million on 30 June 2024

$1.67 million on 30 June 2025

non-concessional contributions

$360,000 if 3 years bring forward rule can be used

$Nil

$240,000 if 2 years bring forward rule can be used

$Nil

$120,000

$120,000

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The Cloudoffis Bulletin - End of Year Edition

As the calendar flips closer to the end of the year and the silly season sneaks up faster than ever, we want to pause and reflect on the incredible year that’s been. Above all, we want to thank the amazing Cloudoffis community for your unwavering support and enthusiasm, making our roles so fulfilling.

Initially, we planned to write all about this year’s highlights, but as we started, we realised one newsletter just couldn’t capture everything. So instead, we’ve created a short clip featuring the Cloudoffis team sharing their top moments from 2024.

Before we sign off for the year, if you missed the ‘Ask Graeme’ webinar, don’t worry! You can catch the full recording and browse through the Q&A from the session here.

Given the fantastic response to this year’s event, we’re excited to announce that plans are already underway for next year’s first ‘Ask Graeme’ webinar. You can register for the February webinar here.

Here’s to a joyful end of 2024 and an exciting year ahead.

Warm wishes
The Cloudoffis Team

Team reflections of 2024

We asked our team what they loved most about working at Cloudoffis in 2024 and their favourite feature launched this year. Here’s what they had to share!

Which feature made the biggest impact for you this year? Let us know – we’d love to hear from you!







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