Self Managed Super Fund (SMSF) Compliance:

SMSF constitute a major proportion of all superannuation assets for a number of reasons. The popularity of SMSF is due to the high level of autonomy, flexibility and accessibility to a variety of assets. Thus you may wish to manage your own superannuation to take advantage of these of benefits and liberties. However, it is important to note that there is a host of SMSF rules and criteria that need to be complied with, such as reporting, disclosure and taxation liabilities. A consultation with an experienced Tax and Superannuation Lawyer can ensure that your deed is appropriately drafted to meet all your needs, goals and expectations and is compliant with the applicable superannuation and taxation law.

The term SMSF, according to Superannuation Law requires the superannuation fund to satisfy certain basic conditions, which includes; the fund must have less than five members, all members are trustees (or directors of a corporate trustee) and there are no other trustees, unless the fund has only one member, and no member of the fund is permitted to be an “employee” of another member (or associate) unless the members concerned are “relatives”. Obtaining professional legal advice from a qualified and experienced Tax and Superannuation Lawyer can assist in ensuring that your SMSF trust deed satisfies these conditions and takes advantage of the concessions and discounts that are available. Obtaining comprehensive legal advice from a skilled a Taxation and Superannuation Lawyer can assist you in managing your SMSF compliance requirements.

In each financial year, SMSF trustees are required to produce a statement of financial position and an operating statement for the fund. Defined benefit funds require a statement of net assets and statement of changes in net assets. Also, a SMSF is required to lodge a combined Self Managed Superannuation Fund Annual Return with the ATO. In conjunction with its annual return reporting requirements, a SMSF is required to appoint an approved auditor, and to have the financial accounts and statements of the fund audited each year by the auditor. The auditor must also conduct a compliance audit to determine whether the fund has complied with the Superannuation Industry (Supervision) (SIS) legislation. Accurate financial and legal advice from a Taxation and Superannuation Lawyer in managing your superannuation can be hugely beneficial to ensure these reporting and disclosure obligations are met.

Also, a SMSF must formulate an investment strategy and document transactions. As a general rule, individual transactions within an investment category do not need to be documented in detail, provided they are in accordance with the SMSF’s investment strategy. However, an SMSF investing in a new investment category must document that decision and adjust its investment strategy accordingly. For example, if an SMSF’s investment strategy includes investments in listed Australian shares, the trustees would not be expected to formally minute each purchase or sale of shares (although correct records of each transaction must be maintained in the books or accounts of the SMSF). However, if the SMSF were to expand or vary its investment strategy to include investments in unlisted property trusts, that decision would have to be formally recorded in the trustee minutes. Professional legal advice by a Superannuation and Taxation Lawyer may be advantageous to ensure these compliance issues are addressed.

If you would like further information or wish to discuss your SMSF matter with us please do not hesitate to contact us by telephone on (02) 9233 4048 or by email to info@navado.com.au.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.