Deductibility of expenses

SMSF Costs in Accumulation Mode: A Comprehensive Guide

The following information pertains exclusively to SMSFs in accumulation mode.

Costs must be apportioned if the SMSF operates in both pension and accumulation modes, or classified as non-deductible if the SMSF is fully in pension mode. Deductibility will also vary depending on whether your SMSF uses the segregation assets method.

Deductible Costs:

• SMSF Setup/Establishment Costs: Not deductible and must be written off.
• Management and Administration Costs: Deductible.
• Accounting Fees: Deductible.
• ASIC Annual Review Fees (for both SMSF and custodian trust): Deductible.
• Investment Expenses for Ongoing Services: Deductible.
• Actuarial Costs: Deductible.
• Supervisory Levy: Deductible.
• Costs for Updating the Trust Deed Due to Legislation Changes: Deductible.
• Life Insurance, TPD, and Income Protection Insurance Premiums: Deductible.
• Property Repair Costs During the Lease Period: Deductible.
• Subscriptions: Deductible if exclusively for managing your SMSF.
• SMSF Software Costs: Deductible.
• Travel Costs for Inspecting Properties in the SMSF: Deductible, but substantiation required.
• SMSF Education Costs: Deductible.

Non-Deductible Costs:

• Bare Trust Setup Costs: Not deductible.
• Costs for Amending the Trust Deed for Property Purchase: Not deductible.
• Initial Repairs After Purchasing the Property: Not deductible.
• Computer or Internet Costs: Not deductible.
• Investment Trading Costs: Not deductible, capital in nature.

Other Costs:

• Borrowing Costs: Amortized over a 5-year period.
• Winding Up Costs: Deductible and can be accrued.

The above list may not cover all SMSF running costs. For further details or assistance, please contact us.