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.