Self Managed Superannuation Fund FAQs

Can an individual be a sole trustee of an SMSF?

No. Under S. 17A(2) of the SIS Act, a single member fund can only be an SMSF if the fund either has a trustee company or two individual trustees (one of which must be the sole member and the other a relative of the member).

Can a single director company be the trustee of an SMSF?

Yes. Under S. 17A(2) of the SIS Act, a single director company can be the trustee of an SMSF provided that there is only one member who is also the director of the trustee company.

Who cannot act as a trustee of an SMSF?

A disqualified person under S. 120 of the SIS Act is defined as follows:

As either an individual who is an undischarged bankrupt or has been convicted of an offence involving dishonest conduct or has had a civil penalty order under the SIS Act made against them
Or as a company, if a director, secretary or executive officer of the company is a disqualified person, the company is being wound up, or the company has a receiver and/or manager appointed.

How often should an SMSF trust deed be reviewed?

In general it is recommended that an SMSF trust deed should be reviewed and updated every 2 to 3 years. A review may be necessary on a more regular basis where the circumstances of the Fund change.

How often should the investment strategy of the fund be reviewed?

All SMSFs need to prepare and implement an investment strategy that sets out the purpose, circumstances, investment objectives and methods of your fund and review it regularly. All investment decisions must be made according to the investment strategy. If the investment strategy changes, then this needs to be documented before investment activity that may contravene the strategy is actioned. There are restrictions on the types of entities a fund can invest in and acquire assets from.

What annual reporting is required?

All SMSFs must lodge an SMSF annual return with the Australian Taxation Office (ATO) each year and pay a $150 supervisory levy. Newly established SMSFs must lodge this return by 28 February, and other SMSFs must lodge their return by 31 October each year. These dates may vary if the SMSF income tax return is lodged by a tax agent.

In addition SMSFs are required to have the financial accounts and statements audited each year by an independent approved auditor, prior to the income tax return being lodged with the ATO.

What records do I need to keep?

The followings records need to be kept for minimum of five years:

Accurate and accessible accounting records that explain the transactions and financial position of your SMSF
An annual operating statement and an annual statement of your SMSF's financial position
Copies of all SMSF annual returns lodged and
Copies of any other statements you are required to lodge with us, or provide to other super funds.

The following records need to be kept for a minimum of ten years:

Minutes of trustee meetings and decisions (where matters affecting your fund were discussed)
Records of all changes of trustees
Trustee declarations recognising the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007
Members' written consent to be appointed as trustees and
Copies of all reports given to members.

How do we know an SMSF continues to be a complying fund?

In the year a fund is initially established it receives a notice from the ATO stating that the fund is a complying superannuation fund. It is then assumed that the fund is a complying fund until such time as the ATO notifies them that the fund is no longer a complying fund (Ref S. 40 and 41of the SIS Act).

If you would like to discuss SMSFs and how they can become part of your wealth creation and estate planning strategy, please call our office on 03 9869 5900 or email us for more information.