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Top 10 SMSF Compliance Tips

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Compliance is a vital part of running any SMSF.

Here are some of my top tips to ensure you reduce your risks.

  1. Record - keeping – Make sure you keep proper records for at least 10 years.  Lodge your annual return on time. ATO can apply fines and penalties apply from 1 July 2013 for failure to prepare financial statements and keep proper records.  
  2. Investment Strategy - From 1 July 2012, every the Investment strategy needs to be updated to include a clause for life and TPD insurance. Each member needs to ensure they document their decision of whether to hold life and/or TPD insurance cover.
  3. Make sure you are using net Market Values for all assets - From 1 July 2012,you will need to document your decision in Minutes about an asset’s net market value and provide support for that asset’s value to the auditor.
  4. Separation of Assets - You must keep money and other assets of the fund separate from money or assets held personally. If your Fund has a corporate trustee, all investments are to be held in the correct corporate trustee name with correct designation account name eg. Bell Pty Ltd <Cameron Super Fund A/C>, not Bell Pty Ltd <Super Fund Account>. 
    For individual trustees the correct name of at least 1 individual trustee: Jack Smith <Smith Super Fund A/C>, not Jack Smith  <Super Fund A/C>.
  5. Contributions – Check that you do not breach your contribution caps. From 1 July 2011, members who breach the concessional cap by $10,000 or less can request a refund by writing to the ATO.
  6. Borrowing – You are generally not allowed to borrow, except via a limited recourse borrowing arrangement.  For limited recourse borrowing arrangements, please ensure there is a Bare Trustee on the purchase contract, a properly executed Bare Trust Deed, the asset bought is on one title where practicable, and there is a loan agreement at market rates.
  7. Rental Property – Ensure current lease/rental agreements are in place and a market rate of rent is used.
  8. Pension Payments – Ensure Regular Pension payments are made during the year and comply with the pension standards.
  9. Prior Year Breaches and Management Letter Points - Are there any breaches from last year that can be fixed? Ensure prior year management letter points are addressed.
  10. In house assets – Review the Fund’s financial position regularly to ensure the in house asset level can be reduced to less than 5%.


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