Did the SMSF incur management or administration expenses?
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No |
Leave J1 and J2 blank. Go to U1 and U2. |
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Yes |
Read on. |
Write at J1 and J2, as required, the amount of management and administration expenses (of a revenue nature) that the SMSF incurred in 2020–21.
Do not include at J1 or J2:
- investment management expenses (include these at I1 or I2 Investment expenses)
- SMSF auditor fees (include these at H1 or H2 SMSF auditor fees).
J1 Deductible management and administration expenses
Write at J1 the amount of deductible management and administration expenses.
The SMSF can claim a deduction for management and administration expenses incurred:
- for the purposes of earning assessable income
- such as the cost of collecting contributions (Australian SMSFs can claim a deduction whether or not the contribution is assessable, foreign SMSFs cannot claim a deduction)
- that were tax-related (as described in section 25-5 of the ITAA 1997), such as
- tax agent fees
- SMSF supervisory levy
- general interest charge
- shortfall interest charge
Do not include at J1 management and administration expenses (or any part of such expenses) that relate to earning:
- foreign income (see Expenses that relate to foreign income)
- non-arm's length income (see Expenses that relate to non-arm's length income)
If the SMSF pays retirement phase superannuation income stream benefits to a member, refer to How expenses are treated when an SMSF has ECPI before you claim a deduction for the SMSF's management and administration expenses.
J2 Non-deductible management and administration expenses
Write at J2 the amount of management and administration expenses that are not deductible.
Non-deductible management and administration expenses include:
- fees for setting up the SMSF
- legal fees incurred to amend a trust deed to include a new member
- late lodgment penalties
- most expenses incurred in earning income that is exempt, such as exempt current pension income.
Example: Management and administration expenses
SMSF J has no exempt current pension income, foreign income or non-arm's length income.
In 2020–21, SMSF J paid the following management and administration expenses:
- $600 for tax agent fees
- $259 for the SMSF supervisory levy
- $1,000 to an SMSF administrator
- $800 to change its trust deed.
SMSF J determines that:
- the tax agent's fees, SMSF supervisory levy and SMSF administrator fees ($1,859) are deductible
- the legal fees for the change to the trust deed ($800) are not deductible.
SMSF J reports:
H1 Deductible management and administration expenses $1,859
H2 Non-deductible management and administration expenses $800
End of exampleContinue to: U1 and U2 Forestry managed investment scheme