Certainly, the provided information outlines important tips for keeping your self-managed superannuation fund (SMSF) compliant. Here’s a summarised version of the key points:
General Tips
- Seek professional advice in fund management and educate yourself as a trustee.
- Use resources like the ATO website’s educational videos for guidance.
Common Breach Avoidance:
- Ensure all investments are in the name of trustees as “trustee for the SMSF.” Reg 4.09A
- Keep pension documentation up to date and pay the correct pension amount annually.
- Insurance policies should be in the fund’s name to claim premiums as tax deductions.
- All assets must be valued at market value each year with appropriate documentation. Reg 8.02B
- Funds cannot loan money to members or relatives. S65
- Transactions with related parties must be at arm’s length (e.g., rent for business property).
- Understand specific rules for assets like artwork, coins, and antiques within the SMSF.
- Lodge annual tax returns on time to avoid fines.
- Consider updating trust deeds or variations if they’re dated before 1 July 2007.
- Seek legal advice for dealing with complex structures involving related parties.
- Design your investment strategy according to the asset classes and risk profile suitable for the trustees and members, meeting regulatory requirements.
ATO Actions for Non-Compliance:
- SMSF trustees may be directed to complete an online Approved Education Course to educate themselves.
- Trustees could be asked to provide an enforceable undertaking to rectify contraventions.
- A rectification direction might be issued to correct breaches.
- Administrative penalties could be imposed based on a points system for various violations.
- Disqualification of a trustee from managing the SMSF.
- Civil and criminal penalties, along with a notice of non-compliance.
- Freezing the assets of the SMSF as a response to serious breaches.
It’s emphasised that the severity of the breach correlates with the severity of the penalty. Non-compliance can lead to losing the tax-exempt status on pensions, resulting in significant consequences. Detailed information can be found on the ATO website.
Please remember that this is a summary and not comprehensive legal or financial advice. Always consult professionals and the relevant authorities for accurate guidance regarding your specific circumstances.