As the trustee of a self-managed super fund (SMSF), you are in control of administering the investments within that fund.
As such, you have certain obligations to fulfil, as stipulated in the Superannuation Industry Supervision (SIS) Act 1993.
Here are some tips to ensure your SMSF remains compliant.
1) Purpose is paramount
SMSF trustees must satisfy the sole purpose test, namely that the fund is maintained solely for the provision of benefits for members upon retirement, death or attainment of a certain age. The sole purpose test should be at the forefront of all decision-making.
2) Invest wisely
As a trustee, you must formulate an investment strategy. You must also monitor all investments closely.
3) Be vigilant
When running an SMSF, you must be cautious about any possible issues that could arise with non-compliance. If there is a problem, address the issue immediately.
4) Be accountable
Trustees should hold regular meetings to discuss the fund’s management. The trustee is also required to appoint an approved SMSF auditor every financial year.
5) Engage an SMSF professional
If you are concerned about potential non-compliance, invest in the services of a SMSF professional who can provide expert advice about how to keep the ATO happy.
What to do if you breach the SIS Act
If you breach the SIS Act, try to rectify the breach immediately. If it cannot be rectified straight away, inform both your accountant and the ATO, and they will guide you through the appropriate next steps.
Depending on the nature, complexity and severity of the breach, the ATO may issue written enforceable undertakings and education directives that the trustee must comply with.
If the non-compliance continues or the breach is serious enough, a notice of non-compliance may be issued. This could result in the fund being taxed at the highest marginal tax rate and the trustees being fined, and potentially disqualified from having an SMSF.
SOURCE, All rights reserved to – LDB, Copyright © 2019 LDB Group, NOVEMBER 29, 2016, How to ensure your self-managed super fund (SMSF) remains compliant, https://www.ldb.com.au/superannuation/ensure-self-managed-super-fund-smsf-remains-compliant/
SMSF Audits is about more than just cost effective audits. We provide complying, timely audits and offer support to solve potential problems. Let us be your competitive advantage.