A 360 ONE guide to the responsibilities, rules and opportunities of an SMSF.
A Self Managed Super Fund (SMSF) puts you in the driver’s seat of your retirement savings. It offers control over how your super is invested and the flexibility to build a strategy around your own goals. With that control comes genuine responsibility, because as a trustee you are accountable for the fund meeting the law at every step. This guide sets out what running an SMSF involves, the rules that you should be aware of, and the contribution figures that apply (as at the time of publishing this article).
What is an SMSF?
An SMSF is a superannuation fund that you run yourself for the benefit of its members, who are usually also the trustees. The defining feature is control. You choose the investments, you set the strategy, and you carry the obligations. The Australian Taxation Office regulates SMSFs and expects trustees to understand and meet their duties, whether they manage the fund themselves or work with advisers.
An SMSF suits people who want a direct hand in their retirement strategy and have the time, interest and balance to make that worthwhile. It is a structure best entered with clear advice on whether it fits your circumstances.
The Sole Purpose Test
The single most important rule is the sole purpose test. An SMSF must be maintained for the purpose of providing retirement benefits to members, or benefits to their dependants if a member dies before retirement. Every decision the fund makes is measured against this standard.
The practical effect is firm. The ATO notes that an investment fails the sole purpose test where it provides a present day benefit to a member rather than a retirement benefit. A holiday house the members use, or an asset the family enjoys before retirement, puts the fund’s compliance at risk. Investments are there to grow retirement savings, and nothing more.
What Can I do With My SMSF Funds?
An SMSF can invest across shares, managed funds, property, cash and term deposits, and other allowable assets, guided by a documented investment strategy. Several rules shape those choices, and they are strict by design.
Loans and financial assistance to members are not permitted. The ATO consistently reports that loans to members and financial assistance are the most commonly reported breach of the superannuation rules, which makes this the clearest line to respect. In house assets, broadly investments in or loans to related parties, are limited to 5% of the fund. Assets generally cannot be acquired from related parties, with limited exceptions such as business real property and listed shares at market value. And the fund’s money must be kept entirely separate from personal or business money.
Property in an SMSF
Holding property through an SMSF is allowed and can suit some strategies, and it carries conditions worth understanding before you commit. The property must meet the sole purpose test, so members and related parties generally cannot live in or use a residential property the fund owns. Business real property can be leased to a related business at market rates under specific rules. Where borrowing is involved, a limited recourse borrowing arrangement has its own requirements. Property is a long term, less liquid asset, so it needs to sit comfortably within the fund’s strategy and its ability to meet expenses and pension payments.
Contributing to Your SMSF
Contribution caps set how much can go into super each year on a concessional and a non concessional basis. The figures for 2025-26:
- Concessional contributions, which are before tax amounts including employer Super Guarantee and salary sacrifice, are capped at $30,000.
- Non concessional contributions, which are after tax amounts, are capped at $120,000.
- Under the bring forward rule, eligible members under 75 can bring forward up to three years of non concessional contributions, to a maximum of $360,000, subject to their total super balance.
- Where your total super balance was below $500,000 at the end of the previous year, you may carry forward unused concessional cap amounts from the previous five years.
From 1 July 2026, these caps rise. The concessional cap increases to $32,500, the non concessional cap to $130,000, and the three year bring forward maximum to $390,000. Members aged 55 and over may also be eligible to make a downsizer contribution from the proceeds of selling an eligible home, which sits outside the standard caps.
Pension Phase and the Transfer Balance Cap
When a member moves into the retirement phase and starts a pension, the transfer balance cap limits how much can be transferred into that tax free phase. The general transfer balance cap is $2 million from 1 July 2025, rising to $2.1 million from 1 July 2026. Amounts above the cap stay in the accumulation phase, where earnings are taxed at the concessional super rate.
The New Tax on Large Balances
A new measure, commonly called Division 296, applies from 1 July 2026 to individuals whose total super balance is above $3 million. It adds an extra layer of tax on the earnings attributable to the portion of a balance above the threshold. The important clarification for trustees who followed the earlier debate: the final law applies to realised earnings and does not tax unrealised gains, which was a significant change from the original proposal. The first assessments are expected in the 2027-28 year.
The Annual Audit + Ongoing Compliance
Every SMSF must be audited each year by an approved independent auditor before the fund’s annual return is lodged. The audit checks both the financial statements and the fund’s compliance with the rules. Alongside the audit, trustees are responsible for keeping a current investment strategy, maintaining records, valuing assets, and meeting lodgement deadlines. Strong funds treat compliance as a steady, year round discipline rather than an end of year scramble, which is The 1% Way applied to retirement.
How 360 ONE Partners With You
An SMSF rewards good structure and consistent attention, and it carries real consequences when the rules are missed. We partner with you to keep your fund compliant and your strategy on track, from the investment strategy and contribution planning through to the annual audit and reporting. As the rules evolve, including the changes arriving in 2026 and 2027, we keep your fund current and your retirement plan moving forward.
This is the 360° view in action: your super, your wider wealth and your retirement goals considered as one connected picture.
Sources. Australian Taxation Office (ato.gov.au) for SMSF trustee responsibilities, the sole purpose test, investment restrictions, contribution caps and the transfer balance cap, and the SMSF Association for trustee guidance. Division 296 detail is drawn from Treasury materials. Figures are current as at the 2025-26 financial year, with 1 July 2026 changes noted.