SMSF setup: smart timing for FY2025

Considering a SMSF setup before 30 June 2025. Pause.
If there are no contributions or assets in the fund, you could be triggering thousands in avoidable compliance costs, all without gaining any strategic benefit.

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Why timing matters for SMSF setup

Setting up an SMSF late in the financial year may feel proactive, but unless contributions are made, the fund can’t pay for its own setup. That $3,300 fee? It becomes a non-deductible ‘blackhole’ expense. To the business. To the fund. To you.

Yes, you could make a member contribution and try to deduct the setup fee, but that activates full-year compliance. Financials. Audit. SMSF tax return. ATO levy. Expect over $4,000 in total costs to justify a deduction. That’s not strategy — that’s paperwork.

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The better approach: wait until 1 July 2025

From 1 July, your SMSF can:

• Receive member contributions
• Pay its own setup costs
• Allow you (as the member) to claim a deduction in FY2026
• Avoid any FY2025 compliance costs

Planning to contribute to your super before 30 June? Use an industry super fund for FY2025, and open your SMSF cleanly in the new year.

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Who this advice is for

This strategy suits:

• Business owners or individuals with $200k+ in super
• Investors preparing to use an SMSF for property
• Anyone wanting to keep startup costs low and compliance tidy

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SMSF & Bare Trust costs: how and when to pay

Action	Timing	Fee	Tax Treatment
SMSF setup	Before 30 June 2025	$3,300	Non-deductible ‘blackhole’ cost
SMSF setup	After 1 July 2025	$3,300	Funded by SMSF or reimbursed as a contribution
Bare trust setup	July 2025 or later	$3,300	Funded by SMSF or reimbursed as a contribution

Note: A bare trust is only needed if borrowing to buy property.

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Paying through the fund (the right way)

• If the fund has received contributions or rollovers, it can pay its own setup and bare trust costs.
• If you pay personally and the fund reimburses you, this may be recorded as a concessional contribution, which allows for a personal tax deduction, subject to caps.

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Final word

Don’t rush your SMSF setup before 30 June unless there’s an urgent need to purchase property.
By waiting just a few weeks, you simplify your paperwork, reduce your costs, and improve your tax position.

As always, pay your tax, but don’t tip!

If you would like to set up an SMSF to invest in property, please don’t hesitate to contact us.