SMSF Basics – Running Your SMSF


Running Your SMSF

SMSF Basics
Running Your SMSF

There are many tasks to keep up with including keeping documents, record minutes and resolutions of meetings about significant decisions and preparing annual tax and regulatory returns NAT 712266, for the SMSF, which are separate from personal returns. It is required that accurate operating statement and statement of financial position be prepared. An independent auditor must be appointed to review the fund is complying, and once a report is given, the income tax and regulatory return can be lodged. A supervisory levy is paid was $180, from 2011, now over $200.

For a minimum of five years, records including accounting records, statements, annual returns must be kept. For a minimum 10 years, keep records such as minutes of meetings, change of trustee, reports to members and trustee consents.

Investment Strategy and Limitations

Section 52 of the SIS act requires a written investment strategy be formulated and given effect. This is to formalise the investment planning and implementation, encouraging a serious and professional approach.

The overall guide is the Sole Purpose Test – that funds are maintained for the sole purpose of providing retirement benefits.

Although the law wants a wide opportunity, some restrictions apply in order to avoid risk, and both the act and the trust deed need to be consulted. Restrictions include general prohibition from acquiring assets from members and related parties, keep assets separate, limited borrowing, personal use of assets, careful use of derivatives and no lending to members.

Compliance, Trustee Responsibilities, Disputes

Trustees must ensure the trust deed is regularly reviewed to accommodate changes in superannuation, taxation and other laws, as well as the circumstances of the members. A breach of the trust deed as considered a breach of the superannuation law.

In all dealings, the Sole Purpose Test is the key requirement – to maintain the fund solely for the core purpose to provide retirement benefits.

Fund members must live in Australia, so be aware that relocation overseas can affect compliance.

Dispute resolution between members and trustees is not available via the Superannuation Complaints Tribunal, so must mediate themselves or resolve via the court system.

Insurance in your SMSF

Consider and seek advice about your insurance needs. What if…? Ensure that your fund applies for cover you need, eg life, total and permanent disability (TPD) and/or disability income insurance (income protection). There can be advantages to hold these in an SMSF – the premiums are deductible for the SMSF. There are other considerations including some circumstances where access to super benefits may be restricted such as disability payments. Tax may also be payable by the SMSF.

Paying Benefits & Income Streams (Pension)

In most circumstances, benefits can be paid to members in lump sum or income stream/pension. Contributions by employers and members and fund earnings are generally classified as “preserved benefits” and cannot be accessed by a member until a condition of release is met. A number of conditions rely on meeting preservation age, which are dates determined by member date of birth.

Date of Birth from To Preservation Age
30 June 1960 55
1 July 1960 30 June 1961 56
1 July 1961 30 June 1962 57
1 July 1962 30 June 1963 58
1 July 1963 30 June 1964 59
1 July 1964 And later 60

When a member generally meets the age of 60, lump sum and income stream payments are tax free. If a member is under 60 and paid a benefit PAYG tax will need to be paid and reported to the member and ATO on a payment summary. The amount withheld is sent to the ATO annually or quarterly.

Conditions of release include reaching preservation age and formally retiring, reaching 65 YO, restricted access at preservation age via transition to retirement, death, permanent incapacity, terminal illness.

See ATO publications (Nat -)

11032    Running a self-managed super fund

71454    How your self-managed super fund is regulated

Get our FREE Expert Guide – Self-Managed Super and You – it has all the info you need to know, with bonus TIPS and CHECKLISTS  to determine if SMSF is for you and what steps are needed to set up, as well as how to get your SMSF set up FREE . It also gives you ALL the Aust Tax Office publications about SMSF (NAT XXXX). Get you copy now – click “Download” top right hand side above. You’ll also get monthly SMSF news, investment teaching and upcoming seminar and workshop briefs! Download your FREE Guide now!


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in SMSF Basics - all to know, Superannuation General and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s