Friday, February 19, 2010

Continual vigilance

Lisa Galbraith, CEO

I have been reading with interest the articles on the ATO cracking down on DIY super funds doing the wrong thing. While the numbers involved are still small (99 made non compliant in 2009) it is significantly higher than the 24 in the previous year. It certainly makes you think.

The ATO provides quite a lot of information about trustee responsibilities – in fact when you establish an SMSF the trustee signs an ATO declaration form

This ATO form clearly states that the sole purpose of the SMSF is “providing benefits to its members upon their retirement (or attainment of a certain age) or their beneficiaries if a member dies”. The form also has a handy list of investment restrictions. Clearly stating the “I am prohibited from . . . having more than 5% of the fund’s total assets at anytime of the year as loans to, or investments in related parties of the fund...” (There are lots of others).

At Cleardocs, as well providing the ATO form, we also provide a document package that includes:

· The important do’s and don’ts for trustees; and

· Your responsibility as a trustee

This second document in particular tries to highlight a trustee’s core obligations to the fund, and includes items such as the record keeping requirements, the importance of the investment strategy, and the trustee’s ongoing obligations to the members.

The ATO website also provides regular updates on their views and approaches to SMSF and is definitely worth bookmarking in your favourites. Your accountant or planner should also be a valuable source of information for you.

Given the cost of being declared non compliant, the impact it will have on your retirement funds and the ATO’s dramatic increased focus on compliance it certainly pays to manage your SMSF properly.

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